The total UPI (Unified Payment Interface) transactions in the country continued its growth in December 2019, after crossing the one billion transaction mark in October 2019.
The National Payments Corporation of India (NPCI), which operates UPI and other retail networks, tweeted that the total UPI transactions in the country for December 2019, stood at 1.31 billion.
This is almost a seven percent growth from November 2019, when total UPI transaction in the country stood at 1.22 billion.
At the same time, the total value transacted through the network also increased, reaching Rs 2.02 lakh crore. This is again a seven percent increase since November 2019 when the total value of transactions on the network was Rs 1.89 lakh crore.
In the last week of December, Finance Minister Nirmala Sitharaman said that there will be no MDR levied on transactions through homegrown payment networks including RuPay and UPI.
The FM added that all companies with a turnover of Rs 50 crore or more will be mandated by DoR (Department of Revenue) to provide the facility of payment through RuPay Debit card and UPI QR code to their customers.
Merchant Discount Rate (MDR) is the fee paid by a merchant to a bank for accepting digital payments.
In response to this announcement, the Payments Council of India earlier this week said that removing MDR charges on transactions through RuPay cards and UPI payments will kill the digital payments industry.
Describing the decision as surprising and will stop investment and innovation, Vishwas Patel, Chairman, Payments Council of India, said,
"The zero MDR on RuPay and UPI will kill the industry and make the business model unviable. It's like nationalisation of the payments industry. If the government wants to drive digitisation, then it should bear the cost."
He further added that the current decision of the government will ‘deflate the hard work done by the acquiring industry and that if MDR is not to be charged to merchants, it should be borne by the government.’
The representative of non-banking merchant aggregators also said that a controlled MDR along with tax benefits makes greater sense to implement for pushing India’s digital economy forward.
Other payment networks
Apart from UPI, in December 2019, IMPS (Immediate Payment Service) transactions grew by 12 percent to 256.47 million from 228.08 million in November 2019. Close to Rs 2.10 lakh crore worth of transactions were transacted through the IMPS network in December 2019.
When it comes to NETC (National Electronic Toll Collection), the total transactions in December 2019 almost doubled when compared to November. This is owing to the government making FASTags mandatory for vehicles passing tolls.
In December 2019, a total of 64.33 million transactions were made through NETC, with Rs 1,256.84 crore being transacted through the network.
(Edited by Saheli Sen Gupta)
Tarush is driven towards delivering unbiased and accurate reportage while engaging with as many mediums as possible to narrate a fresh perspective. Working for the past few years in the digital space with YourStory, he has covered the Indian technology ecosystem extensively, focusing on new age Fintech companies, while building strong connects within the industry.