What happened: Government considering MDR on UPI; cash and UPI signals move differently
Policy debate in India is focused on whether the government can allow Merchant Discount Rate (MDR) charges on certain UPI transactions. The MDR concept refers to a fee levied on merchants for accepting electronic payments, while UPI continues as a rail for customer payments. The debate is occurring alongside reported trends in cash held by the public and UPI transaction value growth.
Cash-with-the-public growth accelerated after 2023–24
The news note links cash usage with broader economic interpretation by giving reported cash-with-the-public growth rates and levels.
Reported cash-with-the-public growth and level:
• Cash-with-the-public growth fell to around 4% in 2023–24.
Related current affairs
- Government assures no charges for UPI users; MDR, if any, will be nominal and threshold-based
- Govt. looking at MDR charge to make UPI self-sustaining
- UPI and the cost of policy reversal
- Rajya Sabha clears two Bills; Minister says consumers will not pay UPI charges
- Lion’s share in digital payments (infographic context within UPI article)
- UPI’s dramatic growth, and its next challenge