UPI MDR is not a tax or surcharge, says Nirmala Sitharaman
Headline by Prism · from 1 report
Finance Minister Nirmala Sitharaman clarified that the proposed 0.4 percent Merchant Discount Rate on select UPI transactions is not a government tax or surcharge.
Telangana TodayThe brief
Written by software from the 1 report below.
- The National Payments Corporation of India will implement a 0.4 percent Merchant Discount Rate on person-to-merchant UPI transactions exceeding Rs 2,000 starting October 15.
- This fee is meant to support the digital payment infrastructure and will be split among banks and payment service providers rather than collected by the government.
- The charge will be borne by merchants, and payments under Rs 2,000 as well as person-to-person transfers will remain free.
- Roughly 96 percent of merchant transactions are expected to be unaffected by the new framework.
What to watch next
- Implementation of the MDR framework on October 15
- Impact of the new charge on merchant adoption of UPI
- Functionality of the dedicated fund for small merchant UPI promotion
The points restate the reports; where one says why it matters, that is Prism's reading, not a reported fact.
Who said what
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Nirmala Sitharaman
Finance Minister
2 quotes · 1 outlet
“This is not a tax, this is not a cess, this is not even a surcharge. And the collection is not coming to the Consolidated Fund of India”
In the article
…the MDR is a charge within the digital payments ecosystem and is levied on merchants by entities facilitating UPI transactions, including payment service providers, merchant banks and other ecosystem participants. “ This is not a tax, this is not a cess, this is not even a surcharge. And the collection is not coming to the Consolidated Fund of India ,” Sitharaman told PTI. Of the total MDR collected, 40 per cent will go to customers’ banks, 30 per cent to the payment gateway, 20 per cent to the UPI app and the remaining 10 per cent to the sponsoring bank of the UPI…
“This is not at all anything to do with the government”
In the article
…to remain free. Sitharaman said the charge would be shared among multiple participants in the payment ecosystem to help maintain technology infrastructure and support improvements and innovation in digital payments. “ This is not at all anything to do with the government ,” she said, adding that the MDR mechanism involved NPCI, merchants, banks, aggregators and other service providers. The Finance Minister also pointed out that merchants already pay MDR on transactions made through…
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NamedIndia · Government of India · National Payments Corporation of India · Nirmala Sitharaman
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