PMK President Anbumani Ramadoss has urged the central government to withdraw its decision to implement Merchant Discount Rate (MDR) charges on UPI transactions, reminding them of the promise to keep digital payments free of cost.
PMK Chief Opposes UPI MDR Charges
Pattali Makkal Katchi (PMK) President Anbumani Ramadoss urged the central government to withdraw its decision regarding the implementation of Merchant Discount Rate (MDR) charges on Unified Payments Interface (UPI) transactions, reminding the Centre of its initial commitment to keep digital payments free of cost.
Addressing reporters in Chennai, Ramadoss expressed concern over the financial burden the proposed charges could impose on consumers and merchants, highlighting that UPI was introduced to promote seamless, fee-free digital transactions across the country. “When UPI was formed, the government gave a promise that there would be no charges. It will be free of cost,” Ramadoss said. Urging the Union government to reconsider the policy update, the PMK chief added, “I appeal to the central government to completely withdraw this order.”
NPCI’s New MDR Framework Explained
The National Payments Corporation of India (NPCI) on Tuesday introduced a new Merchant Discount Rate (MDR) framework, under which UPI merchant transactions above Rs 2,000 will attract an MDR of 0.4 per cent, while consumers will continue to transact free of cost using UPI. The revised UPI MDR framework will come into effect from October 15, 2026, and will apply to select merchant transactions.
Under the new framework, an MDR of 0.4 per cent will apply to Person-to-Merchant (P2M) UPI transactions above Rs 2,000, with the MDR capped at Rs 300 per transaction.
Government Clarifies Scope of New Charges
The government has said that the new UPI framework introduced has no impact on any person-to-person transactions. It said that UPI will continue to remain completely free for all person-to-person transactions, irrespective of the amount transferred.
Approximately 96% of all P2M transactions will remain unaffected. MDR will apply only to specified merchant transactions above Rs 2,000.
The government clarified that MDR is neither a tax nor a charge collected and is distributed among payment ecosystem participants, including banks and payment application providers, to support the operation and continued expansion of the UPI ecosystem. (ANI)
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