New Delhi: Ten years after the Unified Payments Interface (UPI) was introduced, India’s path-breaking and popular payment system looks set for a major policy change.
Till now a service provided free of cost, UPI transactions could, in the future, invite a charge.
Finance Minister Nirmala Sitharaman tabled amendment to the Payment and Settlement Systems Act in Parliament, and one of the proposals under consideration is to levy a Merchant Discount Rate (MDR) of 0.3 per cent to 0.5 per cent on UPI transactions higher than Rs 2,000.
However, the charge may apply only to merchants with an annual turnover of more than Rs 1.5 crore. If that is approved, consumers and small businesses are unlikely to pay anything extra.
The amendment will create the legal framework that will allow the government to introduce MDR, if and when decides to do so.
No decision has been taken on the rate or the transactions that would be covered, as officials are still discussing how the fee could be implemented, Reuters reported.
However, the government will have to keep an open mind on this as the payments industry has been demanding this for years to support further growth of the digital payments ecosystem.
The fee could be levied based on a merchant’s annual turnover instead of the value of individual transactions.
