NPCI defers the 0.4% merchant fee on UPI payments above ₹2,000 until after Diwali
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The news
New Delhi. What is new: on Tuesday NPCI said its UPI and Services Steering Committee had decided, “keeping in mind the festive season”, that the merchant discount rate (MDR, the fee a merchant’s bank charges for accepting a digital payment) on select person-to-merchant UPI payments will apply “immediately post Diwali”, on a date to be notified, not from October 15. Government sources told The Hindu the decision was taken in the Prime Minister’s Office after traders’ appeals; the Confederation of All India Traders had met the Finance Minister on September 30. Payments above ₹2,000 are about two-thirds of person-to-merchant value (The Indian Express). The Supreme Court has asked NPCI, the Centre and RBI to file affidavits by late October.
Prelims nuggets
- MDR has been zero on BHIM-UPI and RuPay debit card payments since 1 January 2020, under Section 10A of the Payment and Settlement Systems Act, 2007 and Section 269SU of the Income-tax Act, 1961.
- NPCI (2008), an RBI and Indian Banks’ Association initiative, is a not-for-profit Section 8 company under the Companies Act.
- RBI regulates payment systems under the Payment and Settlement Systems Act, 2007.