New ask Hacker News story: Some Thoughts on the Economics of UPI and MDR
Some Thoughts on the Economics of UPI and MDR 2 by pyeri | 0 comments on Hacker News. The announcement of MDR charges for certain UPI transactions from 15th October has created a fair amount of panic and controversy, as one might expect. One side of the debate is arguing that this is “only for merchants, not consumers”, that the system cannot run for free forever, and that most UPI transactions will remain unaffected. On the other side, ordinary citizens and merchants are understandably concerned. UPI was deliberately built around a zero-MDR model and was subsequently supported by government incentives. So the shift towards a transaction-funded model naturally raises the question: why now, and who exactly is going to benefit from it? UPI was designed to make digital payments almost invisible: instant, ubiquitous and free. The difficult question was always who pays for the machinery underneath it. The decision presents an interesting economic dilemma. On one hand, there is some prece...