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A revised merchant discount rate framework will apply to select Unified Payments Interface merchant transactions above 2,000 rupees starting 15 October, while person-to-person transfers and payments under the threshold remain free. High-value transactions will attract an MDR of 0.4% capped at 300 rupees per transaction, alongside flat rates for specific sectors like fuel and railways. The announcement has triggered sharp political disagreement, with the Congress labeling the charge a burden on digital payments and questioning its timing during the festive season. The Bharatiya Janata Party defended the policy, clarifying that 96% of small-ticket transactions remain completely unaffected and free for everyday users. Economists and analysts debate whether businesses will absorb the cost or pass it on to consumers, alongside discussions on digital infrastructure funding.

A debate on the proposed merchant discount rate (MDR) levy on Unified Payments Interface (UPI) transactions above Rs 2,000 sparked sharp exchanges between BJP National Spokesperson Sanju Verma, Congress National Spokesperson Brijesh Kalappa, and economist Deepanshu Mohan. Defending the move, Sanju Verma argued that UPI remains free for peer-to-peer and sub-Rs 2,000 payments, noting that '96% of UPI transactions are below the rupee 2,000 category, which is completely free' with fees capped at Rs 300 for higher merchant transactions. Brijesh Kalappa countered that the levy encourages system dishonesty and burdens common users, calling it counterproductive to digital adoption. Professor Deepanshu Mohan cautioned that the policy undermines UPI's character as a digital public good and functions as an indirect consumption tax that could drive users back to cash. Verma dismissed the criticism, arguing UPI remains far more affordable than commercial credit cards.

A revised merchant discount rate framework will apply to select Unified Payments Interface merchant transactions above 2,000 rupees starting 15 October, while person-to-person transfers and payments under the threshold remain free.

A revised Merchant Discount Rate (MDR) framework for select UPI merchant payments above 2,000 rupees will come into effect from October 15. All transactions up to 2,000 rupees and peer-to-peer transfers will remain free. For payments above 2,000 rupees, merchants in sectors such as railways and fuel will pay a flat fee of five rupees, while other merchant transactions will attract a 0.4 per cent charge capped at 300 rupees. While consumers will not face direct charges, questions remain over whether merchants will absorb costs or pass them on. The government will also create a dedicated fund to upgrade digital payment infrastructure for small vendors.