Last Tuesday, RBI supported NCPI's introduction of MDR of 0.4% on person-to-merchant (P2M) UPI transactions above ₹2,000 that will kick in from October 15. Much opinion has flowed since, many arguing that fiscal sense dictates that the fintech expense be charged.
What it, however, chooses to ignore is the larger fiscal and financial discipline embodied in encouraging a majority price-sensitive society to keep moving towards digital payments and a less-cash society. Such an argument doesn't account for the huge savings made by RBI and banks in reducing printing of currency, and logistics of transfer and maintenance of cash.
