India Today ·
UPI fee is peanuts. Losing face for peanuts is nuts
The benefits of keeping UPI free outweighed the cost of keeping UPI free, but the government had an itch to fix what ain't broken. And that too, at a remarkable time.
The government on Tuesday opened a window. People are screaming about the door. The government is right about the need for fresh air. And people are right about a burglar sneaking in because a window, sooner or later, becomes a door. The benefits of keeping UPI free outweighed the cost of keeping UPI free, but the government had the itch to fix what wasn't broken, and now it must scratch in public. The stereotypical Indian thing to do.
First, let us get the boring part out of the way. Because the government thinks the argument ends with the boring part that has numbers. From October 15, a person-to-merchant UPI payment above Rs 2,000 will attract a Merchant Discount Rate (MDR) of 0.4%. A Rs 3,000 transaction costs the merchant Rs 12, a Rs 50,000 payment costs Rs 200, and anything Rs 75,000 and above is capped at a flat Rs 300. Person-to-person transfers stay free at any value, and those are 37% of UPI by volume and 70% by value.