Newsinc24 Team 
Union Finance Minister Nirmala Sitharaman on Monday said users will not be charged Merchant Discount Rate (MDR) on eligible UPI transactions.According to agency reports, Sitharaman said MDR is a charge within the digital payments ecosystem and is neither a tax nor a cess. She clarified that the charge would be borne within the ecosystem and would not be passed on to customers making UPI payments.
#WATCH | Chandigarh: On Merchant Discount Rate (MDR) transaction charges for UPI, Union Finance Minister Nirmala Sitharaman said, "It does not apply to transactions below ₹2,000. It is neither a tax nor a cess; the funds will not be deposited into the Consolidated Fund of India.… pic.twitter.com/iWNTU9NFdK
— ANI (@ANI) September 22, 2026
The clarification comes after the government and the National Payments Corporation of India (NPCI) introduced a revised framework for specified Person-to-Merchant (P2M) UPI transactions above Rs 2,000. Under the framework, a 0.4 per cent MDR applies to eligible transactions, subject to a cap of Rs 300 for transactions of Rs 75,000 and above.The government has clarified that customers will not have to pay MDR and banks have been advised to ensure that merchants do not pass the charge on to them.
Around 96 per cent of P2M UPI transactions will remain unaffected, while all Person-to-Person (P2P) transactions will continue to remain free, according to the government. Sitharaman said she had also clarified the matter in Parliament and accused opposition parties of spreading misconceptions about the revised framework. She urged the public to remain vigilant.Under the revised framework, MDR will be distributed among participants in the payment ecosystem, including banks, payment service providers and UPI application providers.
Sitharaman also commented on the mimicry of Congress leader Rahul Gandhi at the ‘Chhatron Ki Goonj’ event in Indore, calling it disrespectful to the constitutional position of the Leader of the Opposition while acknowledging the importance of freedom of speech in a democracy.On allegations by the Aam Aadmi Party government in Punjab regarding discrimination in the release of Central funds, Sitharaman said states receive funds according to their entitlements and that payments are released on time. She rejected the allegations and said they were aimed at deflecting attention from the state government’s performance, while also linking them to the upcoming Punjab elections.
