View: The government needs to take a step back, reduce its interference with digital payments


Synopsis

Earlier this year, GoI mandated that merchants or sellers could not be charged any fees — merchant discount rate (MDR) —for accepting payments through UPI or RuPay cards. This fee is shared between the banks and the UPI apps. The business model for credit card companies is built on MDR, as merchants are charged for accepting credit cards.

by Abhimanyu GirotraIndia’s flagship payments platform Unified Payments Interface (UPI) touched a new high in September, clocking 1.7 billion transactions and crossing `3 trillion in value. In just four years, it accounts for more than half of digital retail payments — debit and credit cards clock around one billion transactions a month.While UPI has democratised digital payments, the ecosystem — UPI apps and banks — hasn’t reaped its due

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