BHIM UPI charges: Digital payments to get cheaper; No fee for transactions below Rs 100

National Payments Corporation of India (NPCI) has rationalised BHIM UPI charges for merchant transactions to promote digital payments. There is big shift in MDR charges in both small and large UPI merchant transactions.  NCPI has capped merchant discount rate (MDR) for large ticket transactions at maximum Rs 100 and made it zero at offline merchants for transaction up to Rs 100.

MDR has been revised to 0.30 percent with a maximum cap of Rs 100 per transaction. Currently, MDR is capped at 0.25 percent for transactions up to Rs 2,000 and at 0.65 percent for transactions above Rs 2,000. Further, MDR for offline merchant where transactions are done through QR Scan and Pay will be zero for transaction up to Rs 100. These new rates will come into effect from October 1, 2019, said an NCPI statement.

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Dilip Asbe, MD & CEO, NPCI said “The Zero MDR for transaction up to Rs 100 and increased limit for P2PM category (Small merchants) will help faster migration from cash to digital using BHIM UPI. The lower MDR will encourage all categories and types of merchants to deploy the asset-lite acceptance infrastructure (BHIM UPI QR code) to grow digital footprint across the country. We envisage this reduction in MDR will encourage merchants to start accepting BHIM UPI and grow the volume on merchant transactions multi-fold.”

NPCI has been taking various steps for proliferation of merchant payments using UPI. NPCI has already introduced a new merchant category of P2PM category for small merchants wherein inward transactions up to Rs 50,000 per month is allowed. This limit is now extended to Rs 1,00,000 per month and with instructions for real-time credit to merchant’s own account, the statement said.