New UPI MDR framework to support innovation and investment: Assocham | Finance News
Nirmal K Minda, president of Assocham, said the introduction of a calibrated MDR structure for large-value UPI merchant transactions was an important step toward the long-term sustainability of India’s digital payments ecosystem.
Framework to support UPI expansion
He further said the new structure would allow MDR to be distributed among different participants in the payments ecosystem. According to him, this could help expand UPI acceptance, bring more customers into the digital payments system and support the growth in transaction volumes.
He said the framework would also help UPI continue to expand while “strengthening its reach, innovation and infrastructure” across the country.
How the new UPI MDR will work
Certain essential sectors, including railways, telecom and fuel, will have a flat ₹5 fee for eligible transactions, while capital-market transactions will have a lower MDR of 0.02 per cent.
NPCI has also clarified that consumers will continue to be able to use UPI for routine payments without paying a transaction charge. UPI application providers will not be allowed to levy platform fees or other charges on UPI payments. P2P transactions, such as transferring money to family members, friends or other individuals, will also remain free for both the sender and recipient.
