New Delhi: The Government is working on a plan to pass on the benefit of Merchant Discount Rate (MDR) concession given to UPI payments (Unified Payment Gateway) to consumers directly, a report stated. The Ministry of Consumer Affairs under the ministership of Pralhad Joshi is crafting a mechanism that would help the end customers by giving cost advantages, Mint reported.
When a customer makes a payment to the seller (merchant), the latter has to pay a discount rate of 2 to 3 per cent of the total payment made by the former. For example, if a customer pays Rs 100 to the seller, the seller pays Rs 2 to the payment processing gateway companies (Visa, Mastercard) and the remaining Rs 98 is kept with the seller.
Payment Gateway Companies (Visa, Mastercard) charge two to three percent of the total payment, whereas, the UPI payments does not charge the amount.
The report says that the concerned ministry is set to hold consultations with various stakeholders, including e-commerce platforms, payment service providers, the National Payments Corporation of India (NPCI), the Department of Financial Services (DFS), and consumer rights groups. The Ministry is expected to develop its final blueprint in the month of June.
The proposed is expected to increase the acceptance of UPI payments and is poised to make UPI an even more lucrative options of payment, thereby, promoting and mainstreaming UPI.
Is there any roadblocks to the proposed UPI move?
Yes, you heard it right. The Payment Council of India, a 2013 non-banking players (payment) industrial representative body, wants MDR should be levied to some extent on UPI and RuPay as well. They say that due to zero fees, companies are not able to improve their systems, invest in cyber security and new technology. They have suggested that MDR of 0.3% should be imposed on big merchants.
The final say rests with the ministry and the tentative meeting in June will decide further.
The Indian government plans to directly pass on the Merchant Discount Rate (MDR) concession for UPI payments to consumers. The Ministry of Consumer Affairs aims to create a mechanism providing cost advantages to end-users. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
