A proposal to defer the rollout of merchant discount rates (MDR) on Unified Payments Interface (UPI) to January 1 from October 15 is under consideration, with a decision expected in the next few days, local media reports said on Thursday, giving retailers relief at the onset of the festive season.
“The MDR is expected to take effect only after the festive season,” newspaper Business Standard reported, citing sources.
The report pushed shares of payment aggregators Paytm down 10%, pushing its market capitalisation below Rs 1 lakh crore, while Mobikwik and Pine Labs fell as much as 8%.
Paytm shares briefly hit the lower circuit of Rs 1,558.80 apiece, wiping out nearly Rs 10,972 crore from its market capitalisation within minutes of the market opening. Mobikwik shares plunged over 8% to Rs 234.52, while Pine Labs shares fell over 4% to Rs 170.21.
This comes after traders and industry associations raised concerns that the introduction of MDR during the festive sales period would raise transaction costs for businesses.
Members of UPI and Service Steering Committee headed by the National Payments Corporation of India (NCPI) met on Wednesday to discuss MDR timing and other considerations, the report said.
The MDR rollout was earlier scheduled to come into effect from October 15.
Earlier this month, wholesale traders and retailers observed a ‘No UPI Day’ to protest against the proposed introduction of MDR on UPI payments above Rs 2,000.
The government had proposed changes to the Payment and Settlement Systems Act, paving way for MDR on select UPI transactions, with payments above Rs 2,000 made to large merchants emerging as a possible focus.
‘The exemption for transactions of up to Rs 2,000 will stay as decided earlier (even as the rollout gets deferred),’ the report said, citing the source.
The committee is also mulling exemption of businesses with annual turnover of up to Rs 40 lakh from the MDR fee, aiming to significantly expand the existing framework under which businesses with monthly turnover of up to Rs 1 lakh were to be spared under the rollout, the report added.
Source from: https://economictimes.indiatimes.com/news/economy/finance/upi-mdr-rollout-may-be-deferred-beyond-festive-season-to-jan-1-report/articleshow/134779801.cms?from=mdr
