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New Delhi: Deadline for implementing Merchant Discount Rate (MDR) on UPI transactions may be extended, considering financial year rules.
New Delhi: The date for implementation of Merchant Discount Rate (MDR) on digital transactions related to Unified Payments Interface (UPI) may be extended. At present, it was being said that it will be effective from October 15, but now the government is seriously considering an important proposal related to extending this deadline.
According to the information received, a proposal has come forward to extend the deadline for implementing MDR from October 15 to January 1. An official decision in this regard is expected to be taken in the next few days. However, no final decision has been taken yet regarding extending the date.
What is Merchant Discount Rate (MDR)?
Merchant Discount Rate or MDR is the fee that is charged from merchants accepting digital payments to handle the entire transaction process. Any change in the MDR framework related to UPI can have a direct impact on payment service provider companies and the entire business related to digital payments.
Preparation to reduce GST rate on UPI MDR
Apart from this, the GST Council has also considered the proposal to reduce the Goods and Services Tax (GST) on UPI merchant discount rate from the current 18 percent to only 5 percent. Most of the states in the country had expressed their concerns regarding the high GST rate of 18 percent on UPI MDR. Under the new proposed UPI MDR framework, the fee is planned to be levied only on merchant transactions with high financial value.
This proposal to reduce the GST rate to 5 percent has come at a very important time for India’s rapidly growing digital payment ecosystem. Under the new UPI framework, an MDR of 0.4 per cent has been set on select ‘person-to-merchant’ (P2M) transactions above Rs 2,000, with provisions for certain specific conditions and exemptions. According to government data, this will not have any negative impact on about 96 percent of the total ‘person-to-merchant’ UPI transactions.
There was a decline in the shares of major fintech companies including Paytm.
Amid reports of consideration of a proposal to extend the deadline for implementing merchant discount rate on UPI from October 15 to January 1. Paytm And shares of other major financial technology companies including One MobiKwik Systems closed with losses on Thursday.
popular Paytm Shares of ‘One97 Communications’, the company that owns the brand Bombay Stock Exchange (BSE) But at one time during trading it fell by 10 percent to the level of Rs 1,560.60. However, later it saw some recovery and finally closed at Rs 1,640 with a fall of 5.42 percent.
