Centre Rejects Foreign Influence Claims Over UPI MDR Charges, Says Digital Payments Policy Is Independent

The Centre has rejected allegations that the introduction of Merchant Discount Rate (MDR) on specific UPI transactions was influenced by foreign interests, emphasizing that India's digital payments policies are decided independently. The Finance Ministry confirmed that the MDR is introduced to create a sustainable and inclusive digital payments ecosystem while keeping UPI affordable for consumers.

Claims suggesting foreign influence were dismissed, stating that India's UPI policy decisions are made autonomously with the goal of building a self-sustaining, inclusive, and affordable digital payments system. The MDR will only apply to specific merchant transactions and not to peer-to-peer payments, which will remain free. The new framework will take effect from October 15, with an MDR of 0.4% on UPI transactions above ₹2,000, payable by merchants.

The government emphasized that the fee is capped at ₹300 per transaction and that merchants are advised not to pass the cost onto consumers. Opposition parties, particularly the Congress, have criticized the move, alleging it could benefit foreign card companies and increase costs for consumers. Congress MP Jairam Ramesh questioned the rationale behind the 0.4% MDR rate, suggesting it might help US card companies compete with UPI, but the government maintained that the MDR framework aims to strengthen UPI's long-term sustainability without impacting everyday users.