Consumers cheer Government’s lowering of MDR charges to zero for UPI and Rupay payments


  • • LocalCircles has been pursuing the issue since Nov 2016
  • • Currently for businesses with annual turnover above 50 crores, consumers want it for businesses above 1 crore
  • • Consumers want to see private payment platforms adopt to this as well

December 29, 2019, New Delhi: Post demonetisation, Government’s push towards making India a cashless economy has been evident. So much so that in the Budget speech of 2019-20, Finance Minister Smt. Nirmala Sitharaman announced that business establishments with a turnover of more than Rs. 50 crores shall offer low cost digital modes of payment to consumers and no charge or MDR (Merchant Discount Rates) will be charged to customers as well as merchants.

The Government recently announced steps to boost digital transactions in the country. These included prescribing UPI and RuPay as modes of payment for digital transactions without any MDR charges, companies with over 50 crore revenue to receive payments from RuPay debit cards and UPI QR code and banks to popularise RuPay debit cards and UPI.

LocalCircles conducted a survey to check the citizen pulse on the issue and the 3-poll survey received more than 24,000 votes from across the country. First question asked citizens what digital payment mechanism do they utilize the most. 65% said debit/credit card, 31% said net banking, 3% said mobile wallets and 1% said UPI.

Among e-payment users, 65% prefer Credit or Debit card for making payments

Among e-payment users, 65% prefer Credit or Debit card for making payments

Citizens were also asked when doing local purchases, how do traders & retailers respond when they make an electronic or digital payment. 24% said most accept it readily without any excuses and 24% said most accept it readily but few cite transaction charges/inability to accept e-payment as excuse. 32% said only some accept it readily, most cite transaction charges/inability to accept e-payments as excuse. 20% said most still clearly demand cash.

48% citizens say traders/retailers now accepting e-payment readily

48% citizens say traders/retailers now accepting e-payment readily

Many citizens had given feedback that there should be no transaction charges for consumers and merchants on debit and a maximum of 0.5% of transaction value as charge to merchant on credit card transactions. The final question asked if the citizens support it. 42% said yes as this is reasonable. 54% said yes but the merchant charges should also be removed. 1% said no as they should be higher than what is proposed.

Citizens want Credit Card transaction charges for merchants to be 0.5% or lower and Debit Card transaction charges to be brought to Zero

Citizens want Credit Card transaction charges for merchants to be 0.5% or lower and Debit Card transaction charges to be brought to Zero

“The issue of MDR charges has regularly been raised by consumers since Nov 2016 on LocalCircles as most merchants have been discouraging consumers to use digital payments by levying an additional 2% on the transaction”, said Sachin Taparia, Founder & Chairman, LocalCircles “The latest move of the Government to announce zero MDRs for UPI and Rupay for businesses above 50 crores is a positive step to address this consumer concern and we hope that banks and private processors will also find a way to bring their MDR charges to zero by innovating and finding other ways to fund this cost”, continued Taparia. “We hope that in the future, the Government will bring the lower limit for to merchants with 1 crore of turn over and that is when we will see Digital Payments penetrate at massive scale”, said Taparia.

About LocalCircles

LocalCircles takes Social Media to the next level and makes it about Communities, Governance and Utility. It enables citizens to connect with communities for most aspects of urban daily life like Neighborhood, Constituency, City, Government, Causes, Interests and Needs, seek information/assistance when needed, come together for various initiatives and improve their urban daily life. LocalCircles is free for citizens and always will be!

Akshay Gupta - media@localcircles.com, +91-8585909866

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