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RBI Governor Sanjay Malhotra said a small merchant discount rate (MDR) on select high-value UPI transactions is unlikely to have a major impact on digital payment volumes.
A small fee on certain UPI transactions is unlikely to significantly impact transaction volumes, Reserve Bank of India Governor Sanjay Malhotra said on Wednesday.
His comments come ahead of the introduction of a 0.4 per cent MDR on a limited category of higher-value merchant payments through UPI, marking a shift from the platform’s long-standing zero-MDR structure.
Malhotra said the proposed charge is unlikely to materially affect UPI adoption or transaction activity, given the convenience and widespread use of digital payments.
UPI has emerged as India’s dominant digital payments platform, processing billions of transactions every month. The limited MDR is aimed at creating a more sustainable revenue model for payment ecosystem participants while keeping charges low for users.
