Vikrant Shekhawat : Oct 17, 2024, 06:00 AM
UPI Payment Apps: Digital payment system in India has completely replaced the traditional methods of payment. Unified Payments Interface (UPI) has not only made payment easy, but its fast and secure service has made it very popular from the general public to the business class. Now no one wants to be left behind in this era of digital payment.Recently news has come that UPI service may soon be started on 50 new payment apps in the country. This is surprising because despite the absence of Merchant Discount Rate (MDR) in the UPI model, so many companies are coming forward to adopt this system. MDR is the fee that payment service provider companies charge from merchants, and this is their main source of income.Big statement of NPCIDilip Abse, MD and CEO of 'National Payment Corporation of India' (NPCI), a government company that manages the UPI payment service, recently gave an important statement on this. He said that in the last few years, new companies were avoiding adopting UPI payment service due to the lack of MDR, but now a big change is being seen in this in the last one year. According to him, about 50 new third party payment apps have expressed their desire to enter the market and start UPI payment service.He also clarified that UPI transaction is completely free right now and its processing cost is borne by fintech companies and banks together. The use of UPI will remain free in future as well.Effect of absence of MDRMDR or Merchant Discount Rate is actually the fee that payment companies charge from merchants who receive payment using their services. It applies especially to payments made through credit and debit cards. This is the main source of income for companies. However, this facility is not available in UPI as it is based on peer-to-peer network and has been kept free with the aim of making it more and more accessible to the people.Despite this free service of UPI, many fintech companies have created an alternative MDR model for merchants by developing features like soundbox, digital QR code and point of sale (POS) system, so that they can earn through UPI payments.Growing possibilities of digital paymentEven though UPI does not have a direct earning model, the investment of new companies in it is an indication that there are immense future possibilities in the field of digital payments. UPI has brought about a revolutionary change, which is providing new opportunities to the fintech industry. In the coming times, as more companies join this system, India's digital payment economy will become stronger.