UPI fee burden won't fall on consumers, govt plans to track merchants: Report
The NPCI, which operates the UPI platform, issued a circular on September 15 introducing MDR on certain UPI transactions.
The Union finance ministry is crafting a monitoring system to guarantee that the Merchant Discount Rate (MDR) levy on Unified Payments Interface (UPI) payments above ₹2,000 does not trickle down to consumers, according to a PTI report. The ministry has been engaging with payment aggregators and other stakeholders in the UPI ecosystem to raise awareness about the MDR and ensure it is borne by merchants rather than consumers.
The National Payments Corporation of India (NPCI) introduced the MDR for select UPI transactions over ₹2,000 from October 15, with a 0.4 percent charge. The government asserts that the charge will be paid by merchants, not consumers, and that transactions between individuals and the majority of everyday merchant payments will remain free.
The finance ministry has also refuted allegations that US pressure influenced the decision to impose the 0.4 percent MDR on select UPI transactions, stating that the latest NPCI guidelines do not provide US credit cards an advantage over RuPay credit cards. The Department of Financial Services (DFS) also clarified that the NPCI circular of September 15, 2026, does not permit credit transactions on UPI by any credit card other than the RuPay credit card, emphasizing that RuPay credit cards are the preferred choice for users in India.
The DFS further stated that the allegation that MDR has been introduced under external influence is baseless and misleading.
Written by urgent.news from Hindustan Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
