The decision to impose 0.4% MDR on UPI transactions above Rs 2,000 is an important step in creating a sustainable foundation and giving incentives for further expansion in rural and semi-urban areas while ensuring that the large majority of payments remain free of charge, experts said on Wednesday.
It has also been decided to create a dedicated fund for promoting the use of UPI by small merchants, to be set up with a contribution of 5% of total MDR collections. This initiative will expand UPI acceptance, encourage sustained usage, and accelerate the inclusion of small businesses in India's digital payments ecosystem, they said.
