Business Standard ·
Best of BS Opinion: Modest charges will enable healthy growth of UPI
Today's Best of BS Opinion weighs UPI's funding model, freight corridor gains, India's AI strategy, Delhi's student housing crisis and J S Deepak's memoir
Hello, and welcome to the Best of BS Opinion, our wrap of the day's Opinion page.
UPI’s rapid growth has made its long-term financial sustainability an important concern, particularly as government incentives cover only a fraction of the system’s operating costs. The decision to impose a 0.4 per cent merchant discount rate on person-to-merchant transactions above Rs 2,000, while keeping smaller payments and person-to-person transfers free, offers a workable solution, notes today's first editorial. Such transactions represent only 4-5 per cent of volumes but about 70 per cent of value, limiting the impact on everyday users. A modest MDR can help banks and fintechs fund service improvements, cybersecurity, and competition, while reducing reliance on government support and the risks of an entrenched duopoly.
