The Daily Brief Will UPI Stay Free Forever?
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Mar 27, 2025 What does the future hold for UPI and its free transaction model? Explore the heated debate over the Zero Merchant Discount Rate policy and its impact on merchants. Also, get insights into the Indian rupee's surprising resurgence in global markets. Discover the economic risks and opportunities unfolding in this dynamic landscape. Tune in for an engaging discussion on these pressing financial topics!
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Zero MDR Policy
- UPI providers want to charge fees for UPI payments, citing the high cost of maintaining the system.
- The Zero MDR policy, implemented in 2020, eliminated fees to boost digital payments.
Consequences of Zero MDR
- Zero MDR made digital transactions free for merchants, promoting digital payments across India.
- However, payment providers now lack a direct way to recoup their investments in the system's infrastructure.
PCI's Proposal
- PCI suggests exempting smaller merchants from MDR, but implementing it for larger ones.
- This could cover infrastructure costs without burdening smaller businesses.