Archive · 21 Sep 2026
Rajiv Kumar Urges Government to Keep UPI Payments Free
Rajiv Kumar wants the government to keep UPI payments free.
The government has announced a new fee for some larger payments made to merchants.
This fee is called the Merchant Discount Rate, or MDR.
It will be 0.4% for specified merchant payments above Rs 2,000.
The change starts on October 15.
Payments between two people will still be free.
Merchant payments up to Rs 2,000 and payments covered by the small-merchant rules will also remain free.
Customers are not supposed to pay the fee, and UPI apps cannot add hidden charges.
Former NITI Aayog vice chairman Rajiv Kumar urged the government to continue zero-fee UPI payments.
The government introduced a 0.4% Merchant Discount Rate on specified person-to-merchant UPI transactions above Rs 2,000.
The new MDR is scheduled to take effect on October 15, after the September 15 announcement.
Person-to-person payments and merchant payments up to Rs 2,000 will remain free.
Customers will not pay MDR, while UPI apps are barred from platform fees or hidden charges.
- Who
- Former NITI Aayog vice chairman Rajiv Kumar and the Government of India.
- What
- The government introduced a 0.4% MDR on specified person-to-merchant UPI transactions above Rs 2,000, while Rajiv Kumar urged continuation of zero-fee payments.
- When
- The policy was announced on September 15 and is scheduled to take effect on October 15.
- Where
- The policy applies to UPI payments in India.
- Why
- The Finance Ministry statement established a limited MDR for specified merchant transactions while retaining free payments in several categories.
Keep Zero MDR
Introduce Limited MDR
Merchant payment fees
Keep Zero MDR
Rajiv Kumar urged the government to continue zero-fee UPI payments.
Introduce Limited MDR
The government introduced a 0.4% MDR on specified person-to-merchant transactions above Rs 2,000.
Scope of free payments
Keep Zero MDR
The zero-fee approach would continue for UPI payments, according to Rajiv Kumar's appeal.
Introduce Limited MDR
The government retained free person-to-person payments, merchant payments up to Rs 2,000, and transactions covered under the zero-MDR framework for small merchants.
Who bears the charge
Keep Zero MDR
The appeal to keep UPI free emphasizes avoiding fees within the merchant payment system.
Introduce Limited MDR
The Finance Ministry said customers will not pay MDR and advised banks to ensure merchants do not pass the charge to customers.
- New MDR
- 0.4% on specified person-to-merchant transactions above Rs 2,000.
- Effective date
- October 15.
- Announcement date
- September 15.
- Person-to-person payments
- Remain completely free.
- Merchant payments up to Rs 2,000
- Remain free.
- Customer charges
- Customers will not pay MDR.
- UPI app charges
- Platform fees and hidden charges are prohibited.