India paves way for return of merchant fees on digital payments
NEW DELHI: India is moving towards reinstating merchant fees on UPI transactions, according to proposed changes to the country's payment laws introduced in parliament on Tuesday. UPI, a leading real-time payment network, handled 23.6 billion transactions worth 29.9 trillion rupees in July. Industry experts claim that the absence of fees on UPI transactions has hindered the growth of digital payments, as firms struggle to invest in the ecosystem.
The proposed amendment to India's Payment and Settlement Systems Act would allow the introduction of a merchant discount rate (MDR) on digital payments, according to sources. While no decision has been made on the fee level or application, policymakers are debating whether to charge merchants a percentage-based MDR or one based on their annual turnover.
If implemented, the MDR could range from 0.3% to 0.5% on transactions over 2,000 rupees for merchants with an annual turnover exceeding 15 million rupees.
Written by urgent.news from Channel News Asia's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
