CNN Central News & Network-ITDC India Epress/ITDC News Bhopal: A new survey on the proposed MDR charge on UPI has raised questions about the future of digital payments. According to a LocalCircles survey, if the charge on UPI payments above ₹2,000 is passed on to customers by businesses, 76% of users may move to other modes for large payments.
The survey includes responses from more than 67,000 UPI users across 291 districts. According to the survey, 26% of people would prefer to use credit cards for payments above ₹2,000, while 26% would prefer cash. Another 13% may choose debit cards, and 11% may opt for bank transfer, NEFT or IMPS. Only 20% said they would continue to prefer UPI for large payments even if an additional charge is imposed.
Under the MDR arrangement, a 0.4% charge is set to apply on eligible UPI merchant payments above ₹2,000. This charge is meant to be collected from the merchant, not directly from the customer. However, in the survey, 83% of businesses said they were not willing to bear the 0.4% MDR themselves. This has increased concerns that the charge may be passed on to customers or that they may be directed towards other payment modes.
LocalCircles estimates that after MDR is implemented, UPI transaction value may decline by around 10% and volume by up to 4%.
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