UPI Payment Firms Push for Increased Govt Subsidies, Seek MDR for Zero-Fee Transactions Amid Funding Gap

Overview

Payment system operators are requesting increased government subsidies in the upcoming Union budget to cover the costs of zero Merchant Discount Rate (MDR) on low-value Unified Payments Interface (UPI) transactions. They argue that the current allocation of Rs 427 crore is insufficient, while annual costs exceed Rs 5,000 crore. Industry players also plan to propose allowing a 25-30 basis point MDR on UPI payments for large merchants.