New Delhi, September 16 (IANS). The Finance Ministry on Wednesday rejected the claim that the introduction of MDR (Merchant Discount Rate) in UPI was due to foreign interference. Also said that India takes decisions regarding its digital payment system with independence.
Taking to social media platform 'X', the ministry said that since its launch in 2016, UPI has become the world's largest real-time interoperable payment system and this has happened entirely on India's own terms.
The ministry further refuted claims of foreign interference, saying that decisions related to India's UPI policy are taken independently, and are clearly aimed at creating a digital payments ecosystem that is self-reliant, inclusive and cost-effective.
According to the government, 24.5 billion transactions took place through UPI in August 2026 alone. To keep the system self-powered, secure and innovative, a small fee will be charged on high-value merchant transactions. This will provide funds for better infrastructure and cyber security and will help small traders in tier three-four cities and rural areas. Besides, it will also help in providing awareness and incentives to increase the use of UPI.
“The new UPI framework ensures that resources generated from high-value merchant transactions are repurposed to support small businesses and strengthen digital payments across the country,” the Finance Ministry said.
Use of UPI is still free for customers. There will be no charge on sending money to friends, making payments at shops or scanning QR codes.
Only for large transactions above Rs 2,000, merchants will have to pay a small charge (0.4 percent), which is much lower than credit card or other network charges.
In case of railways, fuel, telecom, bill payment and insurance, there is a flat charge of Rs 5 on transactions above Rs 2,000, while on payments of mutual funds and securities, only 0.02 per cent is charged, with a maximum limit of Rs 300.
The ministry further said, “Shopkeepers cannot pass the cost of MDR on to customers. UPI apps also cannot levy any platform charge.”
–IANS
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