‘Not a government issue’: FM Sitharaman explains where UPI MDR charge goes
Finance Minister Nirmala Sitharaman clarified that the Merchant Discount Rate (MDR) on UPI transactions above Rs 2,000 is not a government tax or charge. She emphasized that these costs are borne by merchants and service providers, not consumers, and are not collected by the government.
Why it matters
Clarifying financial policy helps prevent public misinformation regarding digital payment costs and government fiscal policy.
Union finance minister Nirmala Sitharaman on Friday clarified that the Merchant Discount Rate (MDR) on UPI transactions is not a government charge and will not burden consumers.Sitharaman clarified that consumers will not have to pay Merchant Discount Rate (MDR) charges on UPI transactions above Rs 2,000 and, rather it will be borne by traders, merchants, bankers and other participants in the payment ecosystem.Sitharaman said that the MDR is a charge for services provided by entities including NPCI, aggregators, service providers, POS machine providers and merchant banks, and is not imposed by the government.Countering claims that the burden of the charges will fall on customers, she said, "They are not right. They are not correct. Because this is not a tax, this is not a cess, this is not even a surcharge. And the collection is not coming to the Consolidated Fund of India.
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