Digital payments safety: Reserve Bank of India proposes discussion paper

Decision on UPI MDR in govt's domain: RBI governor

The Reserve Bank of India (RBI) has proposed issuing a discussion paper to explore the introduction of calibrated safeguards in digital payments.

 

These measures would include the introduction of lagged credits and additional authentication requirements for specific sections of users, such as senior citizens, among others. The proposal is intended to mitigate fraud and strengthen customer protection.

 

“In alignment with the objective of promoting digital payments in a safe and secure manner, it is proposed to issue a discussion paper exploring the introduction of calibrated safeguards in digital payments, such as the introduction of lagged credits and additional authentication for specific classes of users like senior citizens,” the RBI said in a statement on developmental and regulatory policies.

 

 

During the Monetary Policy Committee (MPC) press conference, RBI Governor Sanjay Malhotra said the central bank would explore sustainable ways to strengthen and improve India’s real-time digital payments system, the Unified Payments Interface (UPI).

 

He added that any decision on a potential merchant discount rate (MDR) was in the domain of the government.

 

“Someone has to pay for the costs (incurred to run UPI). Having said that, it is in the domain of the government now. I am very sure that we will certainly be able to find a way of not only sustaining but improving this very important payments infrastructure, which is so very unique in the years to come, and further improve it,” he said.

 

Malhotra added that customers and relevant stakeholders should not get concerned about the existing situation.

 

Currently, UPI and RuPay debit card payments have a zero MDR, which implies that banks and fintechs bear costs for processing these digital payments.

 

UPI remains free for users making transactions and for merchants accepting payments on the real-time payments' rails.

 

In FY27, ₹2,000 crore has been earmarked under the Union Budget, which, if unchanged, would mark a 9 per cent decline from FY26.

 

The Centre’s incentive scheme for the promotion of low-value BHIM-UPI peer-to-merchant (P2M) and RuPay debit card transactions was allocated ₹2,196.21 crore for FY26, a 14.22 per cent increase compared with ₹1,922.77 crore in FY25.