Don't put a toll on UPI: Why merchant discount rate isn't the answer

India's government is considering introducing a merchant discount rate (MDR) on UPI payments for businesses with ₹1-1.5 crore turnover on transactions above ₹2,000, but policy experts argue this would undermine the frictionless payment system and violate the Payment and Settlement Systems Act; they propose alternative funding mechanisms including independent cost studies, a sustainability fund, and optional value-added service charges instead.

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