UPI MDR charges won't affect consumers: FM

Finance Minister Nirmala Sitharaman stated on Monday that the Merchant Discount Rate (MDR) charges associated with Unified Payments Interface (UPI) transactions will not be passed onto consumers. The charges are imposed between payment service providers to enhance the system and provide superior services. Sitharaman accused opposition parties of spreading false information about the MDR framework and misleading the public.

She clarified that the charges do not apply to transactions below Rs 2,000 and are not a tax or a cess, with the funds not being deposited into the Consolidated Fund of India. The charges are a fee between operators and will not be passed onto the customer. Sitharaman also defended the National Payments Corporation of India (NPCI) for introducing a new MDR framework on September 15, which imposes a 0.4% MDR on person-to-merchant (P2M) UPI transactions above Rs 2,000, with a cap of Rs 300 per transaction.

Around 96% of P2M transactions will remain unaffected. The minister accused the opposition of perpetuating misconceptions and misinforming the public, urging the public to remain vigilant.