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UPI charges may partially offset loss on credit card MDR: RBI paper

UPI charges may partially offset loss on credit card MDR

Xelpmoc Design's IPO will allow subscribers to pay via UPI for first time
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The RBI has sought feedback from stakeholders before October 3 on the possibility of imposing a “tiered” charge on payments made through the UPI based on different amount bands

Subrata Panda Mumbai
There is a possibility that fees levied on credit card transactions may eventually come down, either through central bank intervention or otherwise. And the reintroduction of charges on Unified Payments Interface (UPI) may, perhaps, offset the impact of fee reduction in cards for banks, industry participants said.

That said, the Reserve Bank of India (RBI) has not taken any stance now so the overhang on merchant discount rate (MDR) would continue till the time it comes out with final guidelines, they said.

MDR is the rate charged to a merchant for payment processing services on various payment instruments.

The RBI’s discussion paper on charges in payment