THE RESERVE BANK of India (RBI) asked stakeholders if merchant discount rate (MDR), a fee paid by merchants to acquiring banks, should be brought back for Unified Payments Interface (UPI) transactions in a discussion paper released on Wednesday.
The paper, which sought feedback on the fee structure for a whole gamut of digital payment channels, will be open for comments till October 3.
"In any economic activity, including payment systems, there does not seem to be any justification for a free service, unless there is an element of public good and dedication of the infrastructure for the welfare of the nation. But who should bear the cost of setting up and operating such an infrastructure is a moot point," the RBI said in the paper.
UPI and RuPay debit card transactions currently attract no MDR, following a government decision to relieve merchants of these charges and ensure greater acceptance of digital payments, effective January 1, 2020.
The paper also asked if, in the context of zero charges, it might be more effective to subsidise costs for UPI service providers.
"Adjustment in models may happen when charges are prescribed through statutory or
This story is from the August 18, 2022 edition of Financial Express Mumbai.
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This story is from the August 18, 2022 edition of Financial Express Mumbai.
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