With reference to UPI transaction costs and currency values, consider the following statements: 1. The proposed merchant discount rate is 0.4% for UPI transactions exceeding ₹2,000. 2. The rupee hit an all-time low of 98.50 against the USD in October 2026. 3. The RBI Governor stated that the discount rate will significantly reduce UPI transaction volumes. Which of the statements given above is/are correct?

RBI Governor says 0.4% merchant discount rate won't significantly impact UPI volumes

GS3Economy · S&T · Environment · Security· Monetary policy, RBI & banking· Prelims· 7 October 2026

Impact of transaction costs on digital payment adoption and currency stability: a GS3 and Economy case study.

Why in news

RBI Governor Sanjay Malhotra stated that a 0.4% merchant discount rate for UPI transactions above ₹2,000 will not significantly impact transaction volumes.

Background

RBI Governor Sanjay Malhotra addressed the impact of a 0.4% merchant discount rate on UPI volumes in Mumbai on October 7, 2026. He also commented on the rupee hitting an all-time low of 96.96 against the USD.

Facts for Prelims

FactThe rupee hit an all-time low of 96.96 against the USD as of October 2026.
FactThe proposed merchant discount rate is 0.4% for UPI transactions exceeding ₹2,000.

Prelims practice question

With reference to UPI transaction costs and currency values, consider the following statements:

The proposed merchant discount rate is 0.4% for UPI transactions exceeding ₹2,000.
The rupee hit an all-time low of 98.50 against the USD in October 2026.
The RBI Governor stated that the discount rate will significantly reduce UPI transaction volumes.

Which of the statements given above is/are correct?

(a)1 only
(b)2 only
(c)2 and 3 only
(d)1, 2 and 3

Show answer

Answer: (a) 1 only — Statement 1 is correct. Statement 2 is incorrect: The rupee hit an all-time low of 96.96 against the USD. Statement 3 is incorrect: The RBI Governor stated it will not significantly impact UPI volumes.

For Mains

Q. Analyze the impact of transaction costs on the adoption of digital payment systems like UPI and the role of the RBI in maintaining currency stability.

Dimensions to cover in your answer

Monetary policy trade-off: Balancing transaction fee structures with the goal of increasing digital payment penetration.
Currency volatility: Managing external shocks to the rupee's value while ensuring domestic price stability.

Keywords: Monetary Policy · Digital Payments · Currency Depreciation · Merchant Discount Rate · Financial Inclusion

Read the full news →Report a mistake in this note Source: The Hindu ↗Also: GS2 · e-Governance & citizen services

More Economy notes

India's import bill pressured as Brent crude maintains premium from Houthi risks · 10 October 2026
Reliance and Jio prepare Rs 10.3 lakh crore IPO, potentially India's largest-ever listing · 10 October 2026
Nifty 50 falls 5.5% as RBI faces 4.82% inflation amid rising crude oil prices · 10 October 2026
RBI prohibits rebooking cancelled rupee-linked forex derivatives; cuts hedging threshold to $5 million · 10 October 2026
Nomura cuts PB Fintech net profit estimates by 72% for FY28 after insurance reforms · 10 October 2026
Karnataka Form 7 applications rise by 19,376 amid alleged bulk deletions · 10 October 2026

All Economy current affairs →

Something wrong, or something missing?

Spotted a mistake in a note, or want a topic, format or PDF that would help your preparation? Write to us. We read every mail and fix errors fast.

Report a mistake →Ask for something →thesatyadheesh@gmail.com

This note is generated automatically from SatyaDheesh's news feed and mapped to the UPSC CSE syllabus. Check facts against the original report or PIB before using them in an answer.