UPI Charges Only For Merchants, Not Customers: N Sitharaman On New Tax Bill
Finance Minister Nirmala Sitharaman clarified that the proposed Merchant Discount Rate (MDR) on digital transactions will apply only to merchants, not individual UPI users. The government aims to use these funds to improve digital infrastructure and security.
Why it matters
This clarification addresses public concerns regarding potential costs for digital payment users and highlights the government's strategy for financial sustainability in the fintech sector.
Finance Minister Nirmala Sitharaman on Thursday said the Merchant Discount Rate on digital transactions applies to merchants and not to customers, and the MDR charge would support banks and fintech to invest more on infrastructure and security.Hitting out at Congress leader Jairam Ramesh over his remark that ordinary people may have to pay more for using UPI, Sitharaman, in a post on X, said the UPI and Services Steering Committee headed by NPCI is yet to decide on the MDR, which would happen only after Parliament passes the Taxation and Other Laws (Amendment) Bill, 2026.Through the bill, the government has proposed that the central government can decide, via a notification, which electronic payment modes or transactions would remain free.Ramesh, in a post on X, alleged that the burden of MDR will fall on ordinary people, and the government's claim that this is the only way to keep UPI financial sustainable…
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