Complex priorities: On UPI transactions, MDR charges

The article discusses the new, complex Merchant Discount Rate (MDR) charges for UPI transactions above ₹2,000, implemented by the National Payments Corporation of India (NPCI). It highlights how political considerations led to a convoluted rate structure with exemptions for small merchants and essential sectors, potentially hindering UPI adoption and increasing compliance burdens. The piece also touches upon the revenue implications for the payments ecosystem, the government's directive against passing charges to customers, and suggests the Reserve Bank of India (RBI) could fund the vital payment infrastructure from its surpluses, advocating for a simpler structure before rollout.