Which of the following statements is/are correct regarding the government's incentive scheme for low-value UPI transactions?
1. The scheme provides a 0.15 percent incentive per transaction to acquiring banks for Person-to-Merchant (P2M) payments up to ₹2,000.
2. The Merchant Discount Rate (MDR) for UPI transactions is determined by acquiring banks and is capped at 1% for small neighborhood retailers.

Question

Accepted Answer

A) 1 only — Statement 1 is correct as the Cabinet approved a ₹1,500 crore outlay to provide a 0.15% incentive for P2M transactions up to ₹2,000. Statement 2 is incorrect because the government mandated a zero MDR for all UPI and RuPay debit card transactions starting January 1, 2020, meaning banks cannot charge merchants any fee for these transactions.

Cabinet Approves Incentive Scheme for Low-Value UPI Transactions

India's National Intervention at UN CSW-70