Will you have to pay to use UPI? FM Sitharaman clarifies who bears MDR
Indian Finance Minister Nirmala Sitharaman clarified that any potential Merchant Discount Rate (MDR) on UPI transactions would be charged to merchants, not end-users. She emphasized that the policy aims to support infrastructure and security investments by banks and fintech firms.
Why it matters
The clarification addresses public concerns regarding the cost of digital payments in India, a critical component of the country's rapidly digitizing economy.
Finance minister Nirmala Sitharaman on Thursday pushed back Congress leader Jairam Ramesh's claims that ordinary people could end up paying more for using the Unified Payments Interface (UPI), clarifying that any Merchant Discount Rate (MDR) on digital transactions would be levied on merchants and not on customers.Responding to Ramesh on social media platform X, Sitharaman said that the purpose of the MDR is to strengthen the digital payments ecosystem by enabling banks and fintech firms to invest in infrastructure, innovation and security."Before spreading a canard, @Jairam_Ramesh ji, please consider this: Merchant Discount Rate (MDR) applies only on the merchants and not on the end users/customers. It will support the Banks & Fintech to invest more on infrastructure, innovation & security.
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