1 hr ago
Patnaik, BJP Clash Over Proposed UPI Charges for Merchants
Some digital payments made to shops may soon have a fee.
The fee would apply to certain UPI payments above Rs 2,000.
It would be 0.4% of the payment, with a maximum charge of Rs 300.
The shopkeeper, not the customer, would pay this fee.
Payments between two people would remain free.
The BJP said most UPI payments would still have no fee.
Naveen Patnaik and Congress leaders said the change could hurt small traders and ordinary people.
Some trader groups also asked for exemptions.
The new framework is scheduled to begin on October 15.
Naveen Patnaik urged protection for common people and small traders over proposed UPI charges.
A 0.4% MDR would apply to eligible merchant UPI transactions above Rs 2,000 from October 15.
The charge would be paid by merchants, capped at Rs 300, and not passed to consumers.
The BJP said 96% of UPI transactions would remain free and accused Patnaik of misleading people.
Congress and some traders’ groups opposed the charges, citing inflation and possible burdens on small businesses.
- Who
- Naveen Patnaik, the BJP, Congress leaders and traders’ associations are involved in the dispute.
- What
- The Centre’s revised framework would impose a 0.4% Merchant Discount Rate on eligible merchant UPI transactions above Rs 2,000.
- Where
- The political reactions were reported in Odisha, with Patnaik speaking after arriving at Biju Patnaik International Airport in Bhubaneswar.
- When
- The framework is scheduled to take effect on October 15; Patnaik made his remarks on Friday.
- Why
- Supporters say the charges would help strengthen digital payment infrastructure, while opponents say they could burden consumers and small traders.
Critics of the Charges
Supporters of the Framework
Effect on consumers and small traders
Critics of the Charges
Naveen Patnaik and Congress leader Bhakta Charan Das said the change could burden common people, small traders, grocery shops and vegetable vendors, particularly amid high inflation.
Supporters of the Framework
The BJP said consumers would continue making UPI payments free because the charge would be borne by merchants rather than customers.
Scale of the impact
Critics of the Charges
Critics argued that the charges would add another financial burden to digital payments and asked why banks could not handle the costs.
Supporters of the Framework
BJP spokesperson Anil Biswal said 96% of UPI transactions would remain free because they are below Rs 2,000, leaving only 4% affected.
Purpose of the charges
Critics of the Charges
Opponents described the MDR as an additional burden or tax and some trader groups sought exemptions, including for fuel dealers.
Supporters of the Framework
The BJP said the charges were approved with the Parliament’s Standing Committee on Finance and would help strengthen digital payment infrastructure.
Key facts
- Charge rate
- 0.4% MDR on eligible person-to-merchant UPI transactions above Rs 2,000
- Maximum charge
- Rs 300 per eligible transaction
- Payer
- Merchants would bear the charge; it would not be passed on to consumers
- Free transactions
- Person-to-person UPI transactions would remain free
- Estimated impact
- The BJP said 96% of UPI transactions are below Rs 2,000 and only 4% would be affected
- Start date
- October 15
- Opposition
- Congress, some traders’ associations and the state petrol dealers’ association opposed or questioned the charges
Quotes
Bhakta Charan Das
Odisha Pradesh Congress Committee president
“When we shop, we already pay taxes. Now, the Modi government wants to tax us for paying through UPI. This will hurt consumers, small traders, grocery shop owners and vegetable vendors. Why burden millions of people with another tax when banks can handle digital payments?”
thehansindia.com
“UPI transactions below Rs 2,000 will remain free for merchants. As many as 96 per cent of UPI transactions will remain free as they are below Rs 2,000. Only 4 per cent of transactions will be impacted.”
thehansindia.com
Sources
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