Entrepreneur Ashneer Grover on Tuesday reacted to the recent announcement of a merchant charge on UPI transactions above ₹ 2,000 and said that the move does stand to ultimately impact consumers.
Citing the example of petrol prices, the entrepreneur said in the interview: “The government says we collect excise from oil companies, the consumer won’t be affected. MDR, or Merchant Discount Rate , is a charge within the payment ecosystem. Later in an X post, Ashneer Grover also listed some figures to question the move impose the merchant fee. In another dig at the move, Grover also cited the high cost of running ATMs and cash logistics suggested shutting them down and promote UPI instead. Even so, when asked about the argument that consumers will remain unaffected under the new norm, Grover disagreed. But is that the case? Whether it is tax or any other charge, the consumer pays. UPI payments between two individuals will remain completely free, no matter how much money is transferred.
In a TV interview, the former BharatPe co-founder questioned the move to impose a fee on merchants accepting UPI payments above ₹ 2,000, despite the government’s clarification that UPI payments between two individuals will remain free of charge, irrespective of the amount. Without naming the timelines of the said gains, Grover claimed that the RBI surplus to the government stood at ₹ 2.87 lakh crore (US$30 billion), while total listed bank profits stood at ₹ 4.11 lakh crore (US$42 billion). He also said that National Payments Corporation of India (NPCI)—the operator of UPI—reported a pre-tax surplus of ₹ 1,888 crore (US$200 million). 5 things that remain free The new Unified Payments Interface framework will not mean a charge on people for using UPI, the government has clarified. Payments made to merchants up to ₹ 2,000 will also remain free. Earlier reporting noted: From October 15, merchants accepting UPI payments above ₹ 2,000 will pay a fee under the new framework, but customers will not have to pay this charge. Earlier reporting noted: The government said person-to-person (P2P) transactions account for about 70% of the total value of UPI transactions and will remain outside the MDR framework.
Because of the excise and tax….End of the day who pays, we pay ₹ 100 at the pump for a petrol that costs ₹ 40-50, all. Because they are either below ₹ 2,000 or covered by the zero-MDR framework for small merchants, notably, the government has said that around 96% of merchant transactions will remain unaffected due to the charge.
It is not a tax and is not money collected by the government or NPCI, according to the government. “So, who is facing any loss from UPI and which subsidy is the government paying on UPI?,” Grover asked.
Earlier reporting noted: New UPI charges: Will you pay for sending money or shopping? The clarification from the government came on Tuesday after confusion over the new framework and whether people would have to pay for making UPI payments.
