The Payments Council of India (PCI), the largest industry body for the digital payments ecosystem in the country, says that the digital payment industry wishes for the roll back of the Zero MDR regime for UPI and Rupay debit cards in the country in this budget 2022.
The Central Government and RBI have played a catalytic role in development and growth of digital payments in the country and there by progressing towards achieving the goal of “less-cash society”. The industry appreciates the incentive of Rs 1,300 crore to be reimbursed to banks which is another step in the direction to achieve Government’s Goal of Digital India and will help the industry sustain.
The industry expects a loss of Rs 5,500 crore from UPI and RuPay MDR being Zero. There is still a huge gap to cover so that everyone in the payments value chain gets their credit. With Zero MDR, the government has taken away the ability of these Payment Service Providers (PSPs) to invest in and maintain the financial infrastructure they have built.
PCI in its request to the Ministry of Finance has requested for a roll back of the Zero MDR regime for UPI and RuPay debit or to incentivize the industry with an amount of Rs 4,000 crore to bridge this gap. The payments industry hopes to have some relief which can then be used by them to further expand the digital payments infrastructure of the country and work on some new innovative initiatives to further the digital financial inclusion in the country, says PCI.
On this submission, Vishwas Patel, Chairman, Payments Council of India and Director, Infibeam Avenues, says , “We request the government to consider a roll back of the Zero MDR, with a view to broaden and significantly grow the merchant acceptance base particularly in the MSME space and also to facilitate the deployment of payments infrastructure by non-bank players who have been the biggest deployers of capital in this area for the past few years”
Furthermore, PCI suggests deleting Section 10A from the PSS act and to remove UPI, UPIQR and RuPay from the ambit of rule 119AA of the Income Tax Act, for the development of the digital payments sector.
These suggestions have been made keeping in mind the interests of digital payments services, creation of sustainable models and job creation in the digital payment ecosystem, empowerment of consumers through the digital ecosystem and driving investments in the Indian digital ecosystem. PCI expresses optimism that the Government will take into consideration the criticality of the matter and provide relief to the sector.