A survey conducted by Local Circles revealed that 70% of UPI users would stop using the app if transaction fees were introduced.
The report comes as fintech companies have urged Finance Minister Nirmala Sitharaman to address the issue of implementing a merchant discount rate (MDR) on UPI transactions.
The concern arises from the fintech industry's long-standing demand for MDR on UPI payments, as they do not generate revenue from these transactions.
MDR is the rate charged to a merchant for payment processing services on various payment instruments.
Despite the Reserve Bank of India's discussion paper in August 2022 suggesting a tiered structure charge on UPI payments based on different amount bands, the finance ministry clarified that there was no proposal to levy convenience fees for UPI transactions.
However, some payment gateways have been reported to charge transaction fees for UPI transactions from merchants, some of whom pass these fees on to the consumer.
{{ primary_category.name }}