MDR on person-to-merchant UPI payments above Rs 2,000 is in the news because the Reserve Bank of India (RBI) has introduced a new rule that affects these transactions. According to the RBI, merchants will be charged a Merchant Discount Rate (MDR) of 0.4% for UPI transactions above Rs 2,000. This change aims to reduce the burden on merchants for processing these transactions.
The RBI has clarified that the MDR will be borne by the merchant for UPI transactions above Rs 2,000. However, the RBI has also stated that the MDR will be reimbursed to the merchant by the National Payments Corporation of India (NPCI) if the transaction is settled within the prescribed time frame.
The RBI has provided FAQs to address common queries related to the new MDR rule. The FAQs aim to provide clarity on the new rule and its implications for merchants and consumers. The RBI has emphasized the need for merchants to understand the new rule and its impact on their business operations.
The RBI’s move is aimed at promoting digital payments and reducing the cost of transactions for merchants. However, the exact impact of the new rule on merchants and consumers remains to be seen.