New Delhi, Oct. 13 -- A proposed 0.4% merchant discount rate (MDR)-a fee for accepting digital payments-on select Unified Payments Interface (UPI) merchant payments above Rs.2,000 was scheduled to begin on 15 October. NPCI is now considering deferring it to January 2027, according to media reports. The charge would be capped at Rs.300. For example, a merchant would pay Rs.12 on a Rs.3,000 purchase at the standard 0.4% rate.

The finance ministry says merchants cannot pass the charge to customers. But lawyers question whether enforcement responsibilities and refunds are clearly defined. Who acts if a shop charges extra for UPI payments, and how can the customer recover the money? Mint explains.

The National Payments Corporation of India (...