Center on Saturday issued a statement clearing that consumers will not be charged any transaction charges for making payments through Unified Payment Interface, while a nominal merchant discount rate could be introduced for a limited set of merchant transactions in the future.
The statement comes a day after the lower house of the parliament passed a bill to amend the Payment and Settlement System Act, 2007, which authorises the government to permit banks and other service providers to levy charges on payments through UPI and other notified electronic payment modes. It emphasized that person-to-person transactions will continue to remain completely free, while merchant transactions will be limited above a certain threshold. The charges will be nominal and significantly lower than the MDR applicable to a debit card or credit card transaction. The government said, MDR, if introduced, will be threshold-based and will not apply blanketly to all UPI transactions.
Citing the exponential growth in transactional volumes, the government said the amendment is an enabling provision aimed at ensuring UPI’s long-term sustainability, technological advancement, and resilience against emerging risks.
According to the ministry, the amendment is necessary to encourage more companies to expand their operations in the digital payments sector by creating a self-sustaining revenue model and increasing competition.