0.4% fee i.e. MDR on UPI payments above Rs 2,000 will not be charged from customers. According to government sources, not a single penny of MDR will go to the government treasury. This amount will be distributed among the banks and other institutions associated with the UPI system. The government rejected the allegation of opposition parties including Congress that MDR was a tax imposed on consumers. Sources said that MDR is neither a tax, nor a cess nor a surcharge. Out of the total MDR, 40% amount will be given to the customers’ banks. 30% payment gateway, 20% UPI app and the remaining 10% amount will be given to the sponsor bank of UPI app. Protest on October 2 against the new UPI rule: Merchants and shopkeepers across the country will not take payments through UPI on October 2. Merchant organizations have announced to celebrate No UPI Day on this day in protest against the government’s 0.4% charge on transactions above ₹ 2000. On this day, traders will protest by covering the UPI QR codes, scanners, sound boxes and other digital payment devices installed at their shops with black cloth. Traders are demanding from the government to remove the charge which is going to be implemented from October 15. Maharashtra Chamber of Commerce, Industry and Agriculture (MACCIA) President Ravindra Mangve said that this movement will not be limited to Maharashtra only, but more than 500 major business organizations from across the country will participate in it. Trader organizations’ arguments against UPI charge: Retail traders and distributors work on low margins. Imposing additional charges on digital transactions will increase costs. The objective of digital payments should be to simplify the process, not to burden merchants. The trend of cash has decreased due to UPI. If traders are cooperating in making the system transparent, then it is not right to impose fees on them. Instead of promoting Digital India, imposing charges on traders is like punishing them. If the government does not reconsider this decision, the movement will be further intensified. UPI’s new MDR rules on merchants 0.4% charge on big merchants: Merchants (person-to-merchant) earning more than ₹ 1 lakh in a month will have to pay 0.4% MDR + GST on every payment of more than ₹ 2,000. Relief to small merchants: Merchants whose total monthly earning from UPI is up to ₹1 lakh will not be charged, even if the transaction is more than ₹2,000. Rule for changing category: If a small shopkeeper takes UPI collection of more than ₹ 1 lakh for 3 consecutive months, the bank will automatically shift him to the ‘large merchant’ (person-to-merchant) category. Then he will also have to pay charges. Free sales up to ₹2,000: Even large merchants will not have to pay any fees on small payments of ₹2,000 or less. Maximum charge limit: For transactions of Rs 75,000 or more, a maximum of Rs 300 + GST will be charged from the merchant. Limit applicable per transaction: The limit of ₹2,000 will be applicable on each payment and not on total sales for the day. Flat fee of only ₹ 5 for specific sectors: Merchants related to petrol pumps, railways, bill payments, telecom, insurance and education will have to pay a flat ₹ 5 instead of 0.40% on payments above ₹ 2,000. Still cheaper than cards: MDR charges on UPI are much lower than credit cards (1.5%-2.5%) and debit cards (up to 0.90%). What is merchant discount rate? Merchant Discount Rate i.e. MDR is the fee that a merchant or shopkeeper pays to banks and payment service providers in exchange for using debit/credit card or digital payment (UPI) facility i.e. point of sale machine or payment gateway. This fee is taken to meet the costs of running the digital infrastructure and transfer network properly. This charge has to be paid by the merchant, not by the customer. ———————— Also read this news… Who will have to pay GST on UPI, who will get exemption?: 18% tax will be imposed on the entire amount or only MDR fees, know the answers to such questions. New merchant discount rate i.e. MDR is going to be implemented on high-value UPI transactions from October 15, 2026. After this step of the government, many questions are being raised in the minds of shopkeepers and businessmen regarding the fees and GST imposed on it. Read the full news…
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Government said- The fee on UPI will be divided into 4 parts: This money will not go to the treasury; Then reiterated that the customer will not pay the charge
