All digital transactions using RuPay or UPI will not face additional charges from January 1, 2020. The central government has decided to remove the Merchant Discount Rate (MDR) to promote digital payments. Earlier, the central government amended two acts, Payments and Settlement Systems Act and the Income Tax Act. Now, the Department of Revenue (DoR) will notify UPI and RuPay as the approved mode of payment for digital transactions without any Merchant Discount Rate (MDR).
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This step will promote home-grown digital payment gateways, RuPay and UPI. Other foreign payment gateway companies are VISA and MasterCard. It will also reduce the transaction cost of digital payments as well as it will enhance the use of digital payment in India. This recent move by Finance Minister can play a major role to boost the digital economy of India.
