India Sets New Rules on UPI Payment Charges
Listen to the story
India's popular digital payment system, UPI, is getting a new rule about charges. For years, UPI transactions have been free for users and merchants.
According to a new report, a fee known as MDR will now be applied to certain UPI payments. This charge can range from 5 rupees to 300 rupees, depending on the transaction.
The MDR will only apply to UPI payments above 2,000 rupees. Payments below this amount will continue to be free, as before.
The decision comes after concerns about funding for UPI. The government's budget gave only 2,000 crore rupees to support UPI. However, the system reportedly needs around 20,000 crore rupees.
This gap in funding appears to be a major reason behind the government's decision to introduce charges on larger UPI transactions. The merchant accepting the payment is expected to be involved in these new charges, though the report does not give full details on who exactly must pay.
UPI has become one of the most widely used payment methods in India, with millions of people relying on it daily for shopping, bills and transfers. Because of this, any change to its charging system is likely to affect a large number of users and businesses across the country.
Vocabulary6 words
- UPI
- a digital system used to send money instantly from a phone
- MDR
- a small fee charged when a payment is made using UPI
- budget
- the government's official plan for spending money
- crore
- a unit equal to 10 million
- merchant
- a person or shop that sells goods or services
- transaction
- an act of sending or receiving money
Quiz
Answer key
1. A new charge called MDR will apply to some payments 2. Payments below 2,000 rupees 3. Because the budget for UPI was much lower than what is needed
Fill-in-the-blank listening
Play the audio again and fill in the missing words as you listen.
India's popular digital payment system, UPI, is getting a new rule about _____. For years, UPI transactions have been _____ for users and merchants.
According to a new report, a fee known as _____ will now be applied to certain UPI payments. This charge can range from 5 rupees to _____ rupees.
The MDR will only apply to UPI payments above _____ rupees. Payments below this amount will continue to be free.
The government's budget gave only 2,000 crore rupees to support UPI. However, the system reportedly needs around _____ crore rupees.
This gap in _____ appears to be a major reason behind the government's decision to introduce charges on larger UPI _____.
Discussion questions
- Why do you think UPI payments were free for so long?
- Do you think shops or customers should pay the new MDR charge? Why?
- How might this change affect small businesses that use UPI?
- Do you use digital payment apps? Would a small fee change how you use them?