Amazon Pay India chief pushes for balanced MDR

A non-arbitrary merchant discount rate (MDR) on Unified Payments Interface (UPI) transactions should be determined after discussions between the regulator and industry, Amazon Pay India chief executive officer (CEO) Vikas Bansal told Business Standard on Tuesday.

- HARSH KUMAR

"For any payment method to succeed, there has to be a value exchange among the participants—merchants, customers, and payment providers/banks. Some level of MDR helps enable that value exchange," he said.

MDR is a fee paid by merchants to banks for processing real-time digital transactions. Currently, UPI and RuPay debit card payments attract no MDR, a policy implemented through the National Payments Corporation of India (NPCI).

This zero-MDR regime has been in effect since it was announced in the FY22 Budget to boost digital adoption.

Previously, merchants paid a fee of under 1 per cent of the transaction amount. With UPI becoming the dominant retail payments method and RuPay gaining traction, many experts argue that a complete waiver on MDR may no longer be sustainable.

Bansal emphasised that the structure and rates of MDR should not be arbitrary but carefully crafted through consultation between the regulator and the industry.