Payments Council seeks PM Modi’s intervention to reconsider zero MDR policy for UPI and RuPay debit, ET BFSI
The Payments Council of India (PCI), representing 180 non-banking fee trade gamers, has urged Prime Minister Narendra Modi to rethink the Zero Service provider Low cost Fee (MDR) coverage for Unified Funds Interface (UPI) and RuPay debit card transactions. The PCI’s formal letter highlights considerations over the financial sustainability of the digital payments ecosystem, which has been below stress because the Zero MDR coverage got here into impact in January 2020.
Whereas acknowledging the federal government’s efforts in selling digital funds and monetary inclusion, the PCI famous that the monetary incentives supplied to offset operational prices — Rs 1,500 crore — cowl solely a fraction of the estimated Rs 10,000 crore required yearly to keep up and develop UPI companies. Sustaining India’s digital funds development, the PCI emphasised, calls for continued funding in innovation, cybersecurity, service provider onboarding, compliance, and IT infrastructure.
The calls for
To deal with this problem, the PCI proposes introducing MDR for RuPay debit playing cards for all retailers and an affordable MDR of 0.3% for UPI transactions by massive retailers. This aligns with the prevailing MDR construction for different digital fee modes, equivalent to bank cards (round 2%) and non-RuPay debit playing cards (round 0.9%). The PCI assured that this variation wouldn’t disrupt operations, as massive retailers are already accustomed to MDR on different fee strategies.
The PCI has sought the Prime Minister’s private intervention and requested a chance to current its case in better element. The trade physique reaffirmed its dedication to collaborating with the federal government and regulators to strengthen India’s digital funds ecosystem whereas guaranteeing long-term monetary sustainability.
The letter highlights that India has round six crore retailers accepting digital funds, with 90% categorised as small retailers by the Reserve Financial institution of India (RBI) — having an annual turnover of Rs 20 lakh or much less. Roughly 50 lakh retailers fall below the big enterprise class. Enabling MDR for RuPay debit playing cards and UPI for big retailers would guarantee sustainable monetisation for service suppliers with out disrupting grassroots digital fee adoption.
MDR is described because the lifeline of the digital funds ecosystem. With out it, the sustainability of the infrastructure stays in danger. The PCI believes {that a} affordable MDR for big service provider transactions would enable continued funding in vital areas like cybersecurity, grievance redressal, and service provider assist, guaranteeing that UPI continues to thrive.
