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- INIDAN Payments Council Urges PM to Implement MDR on UPI RUPAY REUPAY REPAY
New Delhi1 hour ago
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The Payment Council of India on Monday wrote a letter to Prime Minister Modi. The letter has demanded PM Modi to reconsider the Zero Merchant Discount Rate (MDR) policy. Council, Unified Payments Interface (UPI) and RuPay Debit Card are in favor of traders not imposing merchant fees.
In fact, the government is considering re -implementing merchant charges on UPI Transaction and Rupay Debit Card. The Economic Times has given this information quoting two senior bank officials as saying.
Currently, no merchant discount rate (MDR) is imposed on these payment methods, as the National Payments Corporation of India (NPCI) provides facility. However, discussion is going on to impose fees on big merchants while keeping transactions free for small businesses.
Why is the government considering this step?
A banker said that banks have introduced a formal proposal to the government. In this proposal, it has been suggested that MDR should be applied to merchants whose annual GST turnover is more than Rs 40 lakh.
The government is also planning to start a tired pricing system. Under this system, large merchants will have to pay higher charges. At the same time, small merchants will have to pay low fees.
A banker said, “The argument is that if large merchants who have card machines are paying MDR on other payment instruments like visa and mastercard debit cards and all types of credit cards, then why can’t they pay for UPI and Rupay debit cards?”
How does MDR work and why was it removed?
Prior to 2022, merchants had to pay less than 1% MDR of transaction amount to banks. However, the government removed these charges in the financial year-22 budget to promote digital payment. Since then UPI has become the most used payment method and Rupay has also become quite popular.
Meanwhile, the industry’s insidars say that large retail merchants averages with more than 50% payment card. Therefore, a small fee is unlikely to have any major impact on UPI payment.
1,611 crore UPI transactions took place in February
In February 2025, 1611 crore transactions took place through Unified Payment Interface (UPI). During this period, a total amount of Rs 21.96 lakh crore was transferred. The number of transactions has increased by 33% on an annual basis.
At the same time, the transfer of the transfer through it has increased by 20%. A year ago, in February 2024, a transaction of Rs 18.28 lakh crore was done through 1210 crore transactions. At the same time, till March 3 this month, about 39 lakh UPI transactions took place, through which an amount of Rs 1050 crore was transferred.
5% less transaction in February than January
A month ago, the number of transactions was reduced by 5% as compared to January. In January, people transferred an amount of Rs 23.48 lakh crore through 1699 crore transactions. The National Payment Corporation of India (NPCI) regulates UPI.
