Money & Banking

PCI calls for roll back of zero MDR in Budget

Our Bureau | Updated on: Jan 21, 2022

Seeks withdrawal of zero MDR regime for UPI and RuPay debit cards

Mumbai, January 21 Ahead of the Union Budget 2022-23, Payments Council of India has called for the roll back of the zero MDR regime for UPI and Rupay debit cards in the country. In its request to the Finance Ministry, PCI has sought the withdrawal of the zero Merchant Discount Rate (MDR) regime for UPI and RuPay debit cards. Alternatively, it has asked that the industry should be incentivised with an amount of ₹4,000 crore to bridge the losses. “The industry expects a loss of ₹5,500 crore from UPI and RuPay MDR being zero,” said PCI in a statement on Friday. With zero MDR, the government has taken away the ability of these Payment Service Providers to invest in and maintain the financial infrastructure they have built, it further said. “The payments industry hopes to have some relief, which can then be used by them to further expand the digital payments infrastructure of the country, and work on innovative initiatives to further the digital financial inclusion in the country,” it said. MDR was waived off on UPI and RuPay platforms starting January 1. Vishwas Patel, Chairman, PCI, and Director, Infibeam Avenues, said: “We request the government to consider a roll back of the zero MDR, with a view to broaden the merchant acceptance base particularly in the MSME space and also to facilitate the deployment of payments infrastructure by non-bank players, who have been the biggest deployers of capital in this area for the past few years.” PCI has also suggested deleting Section 10A from the PSS Act, and to remove UPI, UPIQR and RuPay from the ambit of rule 119AA of the Income Tax Act, for the development of the digital payments sector.  

Published on January 21, 2022
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