Govt May Allow Merchant Charges On UPI Payments Above Rs 2,000

The Centre may allow banks and payment service providers to levy a Merchant Discount Rate (MDR) of 0.25% to 0.4% on UPI payments above Rs 2,000 made to businesses. The proposal follows amendments in the Taxation and Other Laws (Amendment) Bill that remove the legal restriction on charging MDR for notified digital payment modes. Officials say no final decision has been taken on implementation, and person-to-person UPI transfers are expected to remain free. While only around 5% of UPI transactions are above Rs 2,000, they account for nearly 65% of the total transaction value.