Nirmala Sitharaman said that the Merchant Discount Rate (MDR) transaction charges on UPI payments will not be passed on to the consumers
Published: September 21, 2026, 11:07 PM IST
Share Article
https://www.india.com/news/india/upi-mdr-rollout-fm-sitharaman-clarifies-mdr-charges-will-not-be-passed-on-to-consumers-8528585/
UPI MDR rollout: FM Sitharaman clarifies MDR charges will not be passed on to consumers | Image: ANI
Chandigarh: Union Finance Minister Nirmala Sitharaman on Monday said that people using UPI will not have to pay any extra fees due to Merchant Discount Rate (MDR) chargesSpeaking to news agency ANI, she noted that she had already cleared up this issue in Parliament and called out opposition parties for spreading rumors and trying to confuse the public.
She said MDR is a charge 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 National Payments Corporation of India (NPCI) on September 15 introduced a new Merchant Discount Rate (MDR) framework, under which UPI merchant transactions above Rs 2,000 will attract an MDR of 0.4 per cent, while consumers will continue to transact free of cost using UPI.
The government has said around 96 per cent of P2M transactions will remain unaffected, while MDR will be distributed among payment ecosystem participants, including banks and payment application providers.
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.
Sitharaman also lashed out at the mimicry at Congress leader Rahul Gandhi’s ‘Chhatron Ki Goonj’ event in Indore.
“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.
Asked about AAP government’s allegations of discrimination against Punjab state over funds from the Centre, Sitharaman said no state is treated in a manner that causes it loss or forces it to suffer undue hardship.
She said such allegations were being made by AAP “to gloss over non-performance” of its government.
“I can stand anywhere and state this confidently, looking anyone straight in the eyeThere are no cuts or reductions in the funds due to a state based on its entitlements; we release the payments on time,” she said.
“Therefore, making such baseless allegations is wrongPerhaps because elections are approaching in Punjab, they are making such statements to gloss over their own non-performance,” she added.
(with ANI inputs)
