In a move aimed at encouraging digital payments and helping India move towards a less-cash economy, the govt. has taken a significant step.
It has decided that from February 1, companies with annual turnover of over Rs 50 crores which do not accept payments through home-grown RuPay and Unified Payments Interface (UPI) platforms will have to pay a penalty of Rs. 5,000 every day.
No MDR either
Earlier this week, the finance ministry had also announced waiving of merchant discount rates (MDR) on transactions through RuPay and UPI platforms.
MDR is the rate charged to a merchant for digital payment processing services on debit and credit card transactions which is usually 1-3% of the overall transaction amount.
Advantage Home-grown Platforms
Both UPI, which is the payment interface, and RuPay, a card system, are owned by the National Payments Corporation of India.
The govt. is promoting these platforms in order to reduce dependency on global🌎 payment platforms, such as Visa and MasterCard.
Comes as a shock!
This decision from the govt. has been strongly criticised by the Payments Council of India, the industry body that represents the payments and fintech companies in the country.
As per it, such a move will hurt the business of major non-bank payment industry players and affect further investment prospects.
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