UPI transactions continue to remain free for peer-to-peer transactions and 96% of Merchant Transactions. The new UPI framework introduced has no impact on any person to person transactions.
Official Government sources explain that, UPI will continue to remain completely free for all person-to-person transactions, irrespective of the amount transferred. Payments to merchants up to Rs. 2,000, along with transactions covered under the zero-MDR framework for small merchants, will also remain free.
Due to this approximately 96% of all person-to-merchant transactions will remain unaffected. MDR will apply only to specified merchant transactions above ₹2,000.It is clarified that MDR is neither a tax nor a charge collected by the Government or the NPCI.
It is an amount that is distributed among payment ecosystem participants, including banks and payment application providers. This is to support the operation and continued expansion of the UPI ecosystem.
Introduced under the Payment and Settlement Systems Act, 2007, following detailed deliberations by the UPI Steering Committee this change has been effected. The framework seeks to ensure the long-term sustainability of UPI while protecting individuals and small merchants from additional charges
Also Read: Big Relief! Consumers will not pay UPI charges in India clarifies PCI
