A proposal is under consideration for the postponement of the merchant discount rates (MDR) on Unified Payments Interface (UPI) to January 1 from October 15. The decision is expected to be out in the coming days.
The MDR can come into force only after the festive season.
This report has forced down the shares of payment aggregators like Paytm by 10%, reducing its market capitalisation below Rs 1 lakh, and an 8% fall has been witnessed in the shares of Mobikwik and Pine Labs.
This proposal has arrived after traders and industry associations raised concerns that the rollout of the MDR during the festive sales period shall raise transaction costs for businesses.
On Wednesday, a discussion on MDR timing and other considerations was conducted by the members of the UPI and service steering committee headed by the National Payments Corporation of India (NPCI).
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Previously, the rollout of the MDR was scheduled to come into force from October 15.
Wholesale traders and retailers have witnessed a No UPI Day to protest against the proposed rollout of MDR on UPI payments exceeding Rs 2,000.
NPCI had notified an MDR on select Person-to-Merchant (P2M) UPI transactions exceeding Rs 2,000, with merchants directed to charge 0.4% on eligible transactions.
The exemption on transactions up to Rs 2,000 will remain the same even as the introduction is postponed.
The report states that the committee is also considering exempting businesses with an annual turnover of up to ₹40 lakh from MDR fees.
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The aim is to expand the scope of the existing system, under which businesses with a monthly turnover of up to ₹1 lakh were to be exempted during the rollout.
News Source: economictimes.indiatimes.com
