Government Commitment to Promoting Digital Payments
The government has expressed a strong commitment to the promotion of digital payments through the Unified Payment Interface (UPI), with an emphasis on maintaining a zero Merchant Discount Rate (MDR) for these transactions.
Clarification on MDR
- There were speculations about MDR being charged on UPI transactions.
- The finance ministry has clarified that these speculations are false, baseless, and misleading.
- Such rumors create unnecessary uncertainty, fear, and suspicion among citizens.
Legislative Changes
- To promote digital transactions, MDR was set to zero starting January 2020.
- This was achieved through amendments in:
- Section 10A of the Payments and Settlement Systems Act, 2007
- Section 269SU of the Income Tax Act, 1961
Incentive Scheme for Promotion
- The government introduced an "Incentive scheme for promotion of RuPay debit cards and low-value BHIM-UPI transactions (P2M)."
- This scheme was announced in March to support the payment ecosystem effectively.
- It covers only UPI (P2M) transactions up to ₹2,000 for small merchants.
