Chief Minister Omar Abdullah of Jammu and Kashmir endorsed the central government's decision to impose a 0.4 per cent merchant discount rate (MDR) on Unified Payments Interface (UPI) transactions that exceed ₹2,000, a move announced by the National Payments Corporation of India (NPCI) on Tuesday.
Abdullah said that person‑to‑person transfers remain free and that the fee would only affect merchants, stressing that running the UPI infrastructure demands considerable investment.
Opposition leader Rahul Gandhi slammed the policy on X, calling it a "tax on every Indian" and accusing the Modi government of funneling money to the United States.
Under the new framework, the 0.4 per cent rate applies to person‑to‑merchant UPI payments above ₹2,000, with a cap of ₹300 per transaction, and will take effect on 15 Oct 2026.
The government will issue detailed guidelines before the implementation date, and merchants are already reviewing their transaction volumes to gauge the impact on their margins.