Nirmala Sitharaman said that the Merchant Discount Rate (MDR) transaction charges on UPI payments will not be passed on to the consumers
Updated: September 21, 2026, 11:25 PM IST
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UPI MDR rollout: FM Sitharaman clarifies MDR charges will not be passed on to consumers | Image: ANI
Chandigarh: Amid the ongoing confusion and anger over the new UPI Merchant Discount Rate (MDR) framework, Union Finance Minister Nirmala Sitharaman on Monday said that people using UPI will not have to pay any extra fees due to MDR chargesSpeaking to news agency ANI, Sitharaman said that she had already cleared up the issue in Parliament and called out opposition parties trying to confuse the public by spreading rumours.
What Did Nirmala Sitharaman Say?
The Union Finance Minister said MDR is a charge or a fee levied by service providers to improve the system and provide better service.
”It does not apply to transactions below Rs 2,000It is neither a tax nor a cess; the funds will not be deposited into the Consolidated Fund of IndiaIt is a charge levied by service providers to improve the system and provide better service, not for small transactionsMoreover, it is a charge between operators; it will not be passed on to the consumerThe burden does not fall on the customer,” she said.
“I provided a clarification on this very point when the issue was raised during the parliamentary sessionSpreading misinformation, fueling debates based on it, and using that narrative to attack the government has become a habit for the oppositionThis is wrong; there is an effort to spread misconceptions and mislead the publicThe public needs to remain vigilant,” Sitharaman added.
The New MDR Framework
On September 15, the National Payments Corporation of India (NPCI) introduced a new Merchant Discount Rate (MDR) frameworkUnder this framework, MDR of 0.4 percent will be charged on UPI merchant transactions above Rs 2,000However, consumers will continue to use the service free of cost using UPI.
According to the central government, 96 percent of P2M transactions will attract no charge and will remain unaffectedThe MDR will be distributed among payment ecosystem participants, including banks and payment application providers.
MDR Capped At Rs 300 For P2M UPI Transactions Above Rs 2,000
Under the new framework, an MDR of 0.4 per cent will apply to Person-to-Merchant (P2M) UPI transactions above Rs 2,000, with the MDR capped at Rs 300 per transaction.
The Finance Minister reacted to the mimicry at Rahul Gandhi’s ‘Chhatron Ki Goonj’ event in Indore and said that the Congress leader, who is also the Leader of the Opposition, should not encourage such people.
“It is in very poor taste and disrespectful to the constitutional position of the Leader of the Opposition to stand with such people and encourage themWhile freedom of speech is essential for our democracy, mocking in this manner is in bad taste; the Leader of the Opposition should not have been there encouraging such behaviour,” she said.
(with ANI inputs)
