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In a discussion paper released on Wednesday, the Reserve Bank of India (RBI) asked stakeholders if merchant discount rate (MDR), a fee paid by merchants to acquiring banks, should be brought back for Unified Payments Interface (UPI) transactions.
The paper, which sought feedback on the fee structure for a whole gamut of digital payment channels, will be open for comments till October 3.
“In any economic activity, including payment systems, there does not seem to be any justification for a free service, unless there is an element of public good and dedication of the infrastructure for the welfare of the nation. But who should bear the cost of setting up and operating such an infrastructure is a moot point,” the RBI said in the paper. UPI and RuPay debit card transactions currently attract no MDR, following a government decision to relieve merchants of these charges and ensure greater acceptance of digital payments, effective January 1, 2020.
(With inputs from FE)
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