RBI Governor Sanjay Malhotra says the new 0.4% merchant discount rate on select UPI payments is unlikely to significantly affect transaction volumes. Consumers, P2P transfers and about 96% of merchant transactions remain outside the charge.
From October 15, specified UPI merchant payments above ₹2,000 will attract MDR, while consumers, person-to-person transfers and most merchant transactions remain free. The change gives the UPI ecosystem a new revenue stream but also introduces a direct payment-acceptance cost for affected businesses.
A Washington University study finds that buy now, pay later financing can lead retailers to raise sticker prices and, in some conditions, carry less inventory. The effect can reach shoppers who pay upfront as well.