UPI transactions dip in September, ahead of MDR on payments above Rs 2,000 from October 15

From October 15, MDR will apply to UPI payments across the country. A 0.4 per cent MDR will be charged on UPI payments above Rs 2,000. The Government of India's decision is being opposed across the country, with traders in particular angry.

A protest had been planned for October 2 but was called off after a meeting with the Finance Minister. Even so, the effect of the decision has begun to show across the country, largely because of a fall in UPI transactions.

As soon as the government decided on MDR, the number of UPI transactions fell sharply in September. The drop was 1.8 per cent compared with August. A fall that looks small in the figures is quite large for the whole of India. According to data released by the Reserve Bank, UPI recorded 2,407 crore transactions in September, against 2,450 crore in August.

The total value of transactions fell 1.5 per cent in September to Rs 29.37 lakh crore. In August the value was Rs 29.82 lakh crore. The entire system is run by the National Payments Corporation of India (NPCI).

There is a catch, however. Although the monthly transaction count appears to have fallen in September, the daily average has risen. August had 31 days, so its total transactions were higher. September had 30 days, so the total looks lower. In September UPI recorded an average of 80.2 crore transactions a day, against 79.1 crore in August.

On the Immediate Payment Service (IMPS) system run by NPCI, 35.40 crore transactions worth Rs 7.05 lakh crore took place in September. On the Reserve Bank's Real Time Gross Settlement (RTGS) system, 3.25 crore transactions worth Rs 235.71 lakh crore took place in September.

Whatever the figures show now, the real test begins on October 15. If the MDR rule stays as it is, its effect on ordinary people and traders remains to be seen. What is certain is that the rule will affect transactions and the way people pay.