The central government has announced the introduction of a discount rate for merchants (Merchant Discount Rate, UPI MDR) of 0.4 percent for UPI transactions exceeding 2000 rupees. This measure will come into effect next month, on October 15th. Despite active discussions and criticism from the opposition regarding potential harm to ordinary citizens, Finance Minister Nirmala Sitharaman assured the public that regular users will not feel this impact.
Despite the upcoming introduction of UPI MDR, some reports indicate that its impact is already being felt. Concerns are rising among traders and sellers about reduced margins. Furthermore, a recent field study by India Today noted confusion, particularly at petrol pumps, where there is a tendency to insist on cash payments instead of UPI. Such changes may directly affect end customers, although the clear reflection of the effect will only become apparent after the official launch next month.
The opposition continues to criticize the introduction of the MDR commission for UPI. However, Finance Minister Nirmala Sitharaman clarified that this commission does not apply to UPI transactions below 2000 rupees. She reminded that she had previously provided similar clarifications during parliamentary sessions.
In an interview, the minister emphasized that attempts to spread false information, inflate debates, and use this agenda to attack the government are a habit of the opposition. She stated that attempts to mislead and misinform the public are unacceptable, and citizens should remain vigilant.
Nirmala Sitharaman specified that UPI Payment MDR is neither a tax nor a levy. These funds will not go into the consolidated fund of India but represent a fee charged by service providers to improve the system and provide quality services, with no charge for small transactions. Moreover, she clarified that this is a commission between operators, and its burden will not be shifted onto consumers.
It should be noted that although the UPI Payment MDR rate is set at 0.4% for payments over 2000 rupees, the system is not uniform for all transactions. A fixed-rate category has been included, covering various UPI payments, including transactions at petrol stations, where a fixed MDR of 5 rupees will be charged. Additionally, traders with turnover up to 100,000 rupees have been granted a concession as they are included in the Zero MDR category.