Hyderabad, Sept. 16 -- The central government's decision to impose a Merchant Discount Rate (MDR) on Unified Payments Interface (UPI) transactions for merchants has raised concerns about a cash return.

The Finance Ministry clarified that MDR is neither a tax nor a charge collected by the government or the National Payments Corporation of India (NPCI). It is distributed among payment ecosystem participants, including banks and payment application providers, to support the operation and continued expansion of the UPI ecosystem.

Though it is not a charge on customers making UPI payments, there are concerns that merchants may pass MDR charges on to customers.

Many may return to cash: Former BharatPe CEO

Speaking to the media, former Bhara...