MDR waiver to boost UPI payments, may hit earnings of banks, PoS providers

But the move will hit the earnings of banks and PoS providers

The waiver of merchant discount rate (MDR), a charge borne by merchants on digital payments, has left the industry divided.

Experts and industry participants Business Standard spoke to are of the opinion that the move incentivises a pocket of customers (only person-to-merchant transactions) and large retailers to use UPI-linked payment modes while it cripples banks and payment intermediaries like point-of-sale (PoS) providers whose earnings will see a dip.

In the Union Budget, the government announced that no MDR will be charged on businesses with a turnover of over Rs 50 crore or their customers. Those in this bracket will not be charged