Free UPI transactions for all? Govt may rethink policy for large merchants

The government is reportedly considering a proposal to reinstate merchant discount rate (MDR) charges on Unified Payments Interface (UPI) and RuPay-powered debit card transactions, particularly for large merchants, according to two senior banking officials, reported ET.

MDR, a fee paid by merchants to banks for processing real-time payments, is currently not levied on transactions made via UPI and RuPay debit cards. However, banking industry representatives have formally submitted a proposal to the Union government, recommending the reintroduction of MDR for businesses with an annual Goods and Services Tax (GST)-linked turnover exceeding Rs 40 lakh.