NSE expects short-term impact on transaction volumes from UPI MDR charges
The new framework marks a significant shift in the pricing structure for large digital merchant payments after years of zero charges.
The National Stock Exchange (NSE) anticipates a short-term decrease in transaction volumes due to the introduction of Merchant Discount Rate (MDR) charges on UPI transactions exceeding Rs 2,000, according to NSE MD and CEO Ashishkumar Chauhan. However, Chauhan expressed optimism that the impact will diminish over time. The government has exempted UPI transactions up to Rs 2,000 from these charges, while imposing a 0.4% fee on transactions above this threshold, capped at Rs 300 for payments of Rs 75,000 and above.
This new framework concludes the zero-MDR regime that has been in effect since January 2020, a policy largely praised for promoting digital payments but critiqued by financial institutions for its long-term viability.
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