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UPI Fees Spark Merchant Backlash
18 Sep
Summary
- A 40-basis-point merchant discount rate on UPI transactions over Rs 2,000 is reintroduced.
- Digital payment firms welcome the fee for cost recovery and future investment.
- Retailers, stock brokers, and political parties oppose the new UPI charges.
A 40-basis-point merchant discount rate (MDR) has been reintroduced for peer-to-merchant (P2M) transactions conducted via the Unified Payments Interface (UPI) platform, specifically for those exceeding Rs 2,000. This reintroduction has been met with divided reactions across the digital payments landscape.
Industry stakeholders within the digital payments ecosystem have expressed support for the new MDR. They argue that the fee is crucial for recovering operational costs and providing the necessary capital for future investments and innovations within the platform. This perspective highlights the financial sustainability needs of the digital payment infrastructure.
Conversely, the move has ignited strong opposition from several quarters. Retailer associations, petroleum dealers, stock brokers, and opposition political parties have voiced their concerns. Their primary objections revolve around the additional financial strain placed upon merchants and the potential for this cost to be ultimately borne by consumers, raising questions about the overall impact on digital transaction affordability.
