UPI MDR on Train Tickets: Starting from October 15th, a significant change is coming to the digital payment landscape. A Merchant Discount Rate (MDR) of 0.40% will be applied to transactions made via UPI that exceed Rs 2,000. While a fee will also be introduced for railway ticket bookings, it will be distinct from the standard merchant category.
Railways will now be categorized alongside essential sectors such as utilities, fuel, telecom, and insurance. Consequently, a fixed fee of Rs 5 will be levied for purchasing train tickets over Rs 2,000 using UPI. There has been speculation about whether this fee will be charged to passengers or if it will be paid to IRCTC.
The answer to this query is reassuringly straightforward – passengers will not be required to pay any additional amount. As per government regulations, the MDR is always borne by the merchant, meaning the seller or service provider, and cannot be transferred to customers. This implies that if you buy a train ticket for Rs 3,000 through UPI on the IRCTC platform, only Rs 3,000 will be debited from your bank account, not Rs 3,005. The entire cost will be covered by the merchant, which in this case is the Railways/IRCTC and the banks.
Key points:
– MDR will not be applicable on rail tickets.
– Transactions above Rs 2,000 at regular retail stores or other merchant payments will incur an MDR of up to 0.4%.
– Railways, along with essential sectors, will have a fixed MDR of Rs 5 for payments exceeding Rs 2,000, regardless of the ticket price.
From an individual passenger’s perspective, a Rs 5 fee may appear insignificant, but within the vast network of the Indian Railways, this amount translates to substantial figures. Railway estimates suggest that if around 100,000 tickets valued at more than Rs 2,000 are booked through UPI daily, a daily MDR of Rs 5 lakh will be generated. Extrapolating this over a year, it could accumulate to approximately Rs 18.25 crore.