Archive · 16 Sep 2026
UPI MDR Rules Trigger Political Fight Over Who Pays
India is changing some rules for fees on UPI payments made by merchants.
The government says over 96% of UPI transactions will still be free.
It says certain merchant payments will have a 0.4% fee.
The government also says this fee is lower than usual debit card charges.
Opposition leaders are worried that businesses or the public could still feel the cost.
They have also questioned the role of US-linked companies.
The disagreement is about who should pay the fee and how the money should be shared.
The debate could affect how people and businesses think about digital payments in India.
The Centre says more than 96% of UPI transactions will remain free.
A 0.4% MDR will apply to specified merchant transactions under the revised framework.
The Centre says the rate is lower than typical debit card charges.
Congress and NCP-SP representatives have questioned the impact on businesses and the public.
The debate also concerns US-linked companies, fee distribution and the future of India’s digital payments ecosystem.
- Who
- The Centre, Congress and NCP-SP representatives, businesses, the public and US-linked companies are involved in the debate.
- What
- A political dispute has emerged over revised UPI Merchant Discount Rate rules and the cost of specified merchant transactions.
- When
- The dispute is taking place following the introduction of the new UPI MDR framework; no specific date is stated.
- Where
- India’s UPI and digital payments ecosystem.
- Why
- The sides disagree over who bears the cost, how fees are distributed and what effect the rules could have on businesses and the public.
Centre’s Defense
Opposition Concerns
Cost of UPI transactions
Centre’s Defense
The Centre says more than 96% of UPI transactions will remain free and that a 0.4% MDR will apply only to specified merchant transactions.
Opposition Concerns
Opposition representatives question whether businesses or the public will ultimately bear costs under the revised framework.
Level of the fee
Centre’s Defense
The Centre says the 0.4% MDR is lower than typical debit card charges.
Opposition Concerns
Opposition leaders remain concerned about the effect of the fee and how charges will be distributed.
Role of companies
Centre’s Defense
The Centre’s position, as described, focuses on the revised framework and keeping most UPI payments free.
Opposition Concerns
Congress and NCP-SP representatives have raised concerns about the role of US-linked companies in the payments system.
- Transactions remaining free
- The Centre says more than 96% of UPI transactions will remain free.
- Specified merchant MDR
- A 0.4% MDR will apply to specified merchant transactions.
- Government comparison
- The Centre says the 0.4% rate is lower than typical debit card charges.
- Opposition concerns
- Congress and NCP-SP representatives have questioned the impact on businesses and the public.
- Additional issue
- Opposition leaders have raised concerns about US-linked companies and fee distribution.
- Broader context
- The dispute is being examined in relation to India’s digital payments ecosystem.