New Delhi. The political debate has intensified regarding the new Merchant Discount Rate (MDR) on Unified Payments Interface (UPI). Congress leader and Leader of Opposition in Lok Sabha Rahul Gandhi has hit out at the Central government over the proposed fee on some UPI merchant payments above Rs 2,000, demanding its withdrawal. He alleged that American pressure played a role in this decision and America could benefit from it. Rejecting these allegations, the Central Government has clarified that MDR is not a tax and its burden will not be passed on the customers.
New MDR framework will be implemented from October 15
Under the new arrangement, MDR will be applicable on eligible merchant UPI transactions from October 15, 2026. The rate has been fixed at 0.4 percent on eligible Person-to-Merchant (P2M) payments above Rs 2000. The maximum limit of MDR on transactions of Rs 75,000 or more will be Rs 300. Whereas Person-to-Person (P2P) UPI payments will remain out of this system.
There are also separate provisions in the government system for small businessmen and some essential services. Prescribed discounts and lower charges in some areas have been provided for small traders.
Rahul Gandhi accused American pressure
Rahul Gandhi demanded the government to withdraw the new system on social media. He alleged that Prime Minister Narendra Modi is bowing to the pressure of US President Donald Trump and imposing duty on UPI is opening the way for America to benefit. These are political allegations of Rahul Gandhi and Congress; No independent evidence to support these has been established in this report.
Questions have also been raised on the government's decision by the Congress. The party has raised questions linking the MDR regime to increasing competition for American companies in the Indian digital payments market.
Center said- no fee will be charged from the customer
The Finance Ministry has rejected Rahul Gandhi's allegations and said that MDR is neither a tax imposed by the government nor a fee collected by the government or NPCI. According to the ministry, this amount will be distributed among various parties associated with the UPI payment system and will be used in the operation and expansion of the system.
The government has also said that banks have been instructed that the burden of MDR cannot be passed on to the customers. The government has also clarified that the payment system will continue for UPI customers.
The debate on UPI charges may continue further
Differences have come to light between the government and the opposition regarding the new MDR framework. On one hand, Congress is linking it to American pressure and possible burden on the common people, while the Central Government is calling it a step taken towards making the UPI system economically sustainable. At present, political rhetoric is going on on this issue and the new system is to be implemented from October 15.