FM Sitharaman clarifies UPI MDR; no charge below ₹2,000 - The Economic Times Video
- Finance Minister Nirmala Sitharaman clarified on Friday that the new Merchant Discount Rate on Unified Payments Interface transactions will not be passed to consumers, rejecting Opposition claims that it constitutes a tax.
- The National Payments Corporation of India introduced this framework to ensure a sustainable revenue model for the digital payments ecosystem, applying a 0.4% MDR to merchant transactions exceeding ₹2,000 from October 15.
- Revenue collected will be distributed among ecosystem participants, with 40 per cent going to customer banks, 30 per cent to payment gateways, 20 per cent to the UPI app, and 10 per cent to the sponsoring bank.
- Sitharaman dismissed allegations of external pressure as "absolutely baseless," emphasizing the MDR is a professional industry decision rather than a government levy accruing to the Consolidated Fund of India.
- Person-to-Person UPI transfers and transactions up to ₹2,000 remain free, while small merchants collecting under ₹1 lakh monthly via QR codes are fully exempt, shielding about 96 per cent of all merchant transactions.
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Proposed UPI MDR not a tax, cess or surcharge: FM
New Delhi: The proposed Merchant Discount Rate (MDR) on select high-value UPI transactions is neither a tax, cess nor a surcharge, and the collections will not accrue to the government, Finance Minister Nirmala Sitharaman said, rejecting criticism from Opposition parties. The Finance Minister said the MDR is a charge within the digital payments ecosystem and … Get the latest updates in Hyderabad City News, Technology, Entertainment, Sports, Poli…
NPCI says 96% of UPI merchant payments face no GST impact
NPCI has clarified that the new MDR on select UPI merchant payments will not affect most transactions. The update underlines that low-value payments and small merchants largely remain outside the fee and related GST impact.
Regarding UPI Payments MDR, Finance Minister Nirmala Sitharaman has once again clarified that it is neither a tax nor a cess. It is a charge levied by service providers to improve the system and provide better service; there is no charge for small transactions.
FM Sitharaman clarifies UPI MDR; no charge below ₹2,000 - The Economic Times Video
Finance Minister Nirmala Sitharaman has clarified the new UPI Merchant Discount Rate framework, stating that consumers will not bear MDR charges. UPI payments to merchants up to ₹2,000 will remain free, while specified higher-value merchant transactions may attract MDR. Person-to-person UPI transfers will continue without charges, according to the government.
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