RBI Deputy Governor Says MDR Levy Won't Push Consumers Back to Cash

The Reserve Bank of India's Deputy Governor said on Tuesday that the newly announced Merchant Discount Rate (MDR) on UPI payments is unlikely to drive consumers back to cash usage. From October 15, a 0.4% MDR will be charged on person-to-merchant UPI transactions exceeding ₹2,000, with merchants bearing the cost. The charge is capped at ₹300 for transactions of ₹75,000 or more.

The MDR implementation aims to address concerns about the sustainability of the digital payments ecosystem while maintaining consumer participation in digital transactions.