On 15 September, the National Payments Corporation of India rolled out a new Merchant Discount Rate (MDR) framework, levying 0.4% on Person‑to‑Merchant UPI payments that exceed Rs 2,000, with a cap of Rs 300 per transaction. The change is projected to leave roughly 96% of P2M transactions cost‑free, as only higher‑value transfers will incur the fee.
Finance Minister Nirmala Sitharaman told ANI that the MDR is a fee between payment operators, not a tax or cess, and that the collected amount will not enter the Consolidated Fund of India. She warned that the opposition had amplified confusion, urging citizens to stay alert to misinformation.
NITI Aayog vice‑chairman Ashok Kumar Lahiri echoed the Centre’s stance, arguing that businesses must find self‑sustaining models rather than rely on subsidies, citing Chanakya’s metaphor of a ruler collecting taxes gently. Lahiri clarified that his remarks were personal and not an official NITI Aayog position.
A senior bureaucrat told PTI that the government has no intention of revisiting the MDR policy. Merchants, especially those handling bulk grocery sales, are monitoring the cap closely, while everyday users can continue using UPI without new charges. The next phase will see regulators assess the framework’s impact on transaction volumes over the coming quarter.