With reference to the Merchant Discount Rate (MDR) on the Unified Payments Interface (UPI), consider the following statements:
- All Person-to-Person (P2P) transfers are subject to a uniform 0.4% charge regardless of transaction volume.
- Small merchants under the Person-to-Person-Merchant (P2PM) category receiving up to ₹1 lakh per month are exempt from the newly notified MDR.
- Essential public utility payments and railway ticketing transactions above ₹2,000 are subject to a flat fee rather than an ad-valorem percentage charge.
Which of the statements given above is/are correct?
Explanation:
o Statement 1 is incorrect: All Person-to-Person (P2P) transfers remain free of charge and are completely exempt from MDR, regardless of the amount transferred.
o Statement 2 is correct: Small merchants in the P2PM category receiving up to ₹1 lakh per month are protected under the zero-MDR framework to keep entry barriers low for small vendors.
o Statement 3 is correct: Selected essential utility transactions, fuel, and rail travel above ₹2,000 are subject to a flat processing fee of ₹5 rather than the 0.4% ad-valorem MDR rate.
Explanation:
o Statement 1 is incorrect: All Person-to-Person (P2P) transfers remain free of charge and are completely exempt from MDR, regardless of the amount transferred.
o Statement 2 is correct: Small merchants in the P2PM category receiving up to ₹1 lakh per month are protected under the zero-MDR framework to keep entry barriers low for small vendors.
o Statement 3 is correct: Selected essential utility transactions, fuel, and rail travel above ₹2,000 are subject to a flat processing fee of ₹5 rather than the 0.4% ad-valorem MDR rate.