Business

UPI MDR charges won’t affect consumers: FM

By Sohail Khan 21 September 2026, 10:50 pm

Benchmarks
Nifty23,414.3067.9

FEATURED FUNDS★★★★★

Motilal Oswal Midcap Fund Direct-Growth

5Y Return
22 %

Invest Now

Enter search text:

Business News›News›Economy›Policy›FM Nirmala Sitharaman clarifies UPI MDR charges won't affect consumers, hits out at opposition over misinformation

Read Today's Paper

FM Nirmala Sitharaman clarifies UPI MDR charges won't affect consumers, hits out at opposition over misinformation
Synopsis

Finance Minister Nirmala Sitharaman stated Merchant Discount Rate charges will not be passed to consumers. She clarified these charges are between payment service providers for system improvement. Opposition parties were accused of spreading misinformation regarding the UPI MDR framework. Sitharaman also criticized mimicry at a recent Congress event in Indore. She further denied allegations of discrimination in fund allocation to Punjab state.

Union Finance Minister Nirmala Sitharaman on Monday said Merchant Discount Rate (MDR) charges on Unified Payments Interface (UPI) transactions will not be passed on to consumers. She said the charges are levied between payment service providers to improve the system and ensure better services.

Sitharaman accused opposition parties of spreading misinformation about the MDR framework and attempting to mislead the public.

Also Read: UPI’s new MDR pot: 5% of collections to be used for bringing small merchants online

"It does not apply to transactions below Rs 2,000. It is neither a tax nor a cess; the funds will not be deposited into the Consolidated Fund of India. It is a charge levied by service providers to improve the system and provide better service, not for small transactions. Moreover, it is a charge between operators; it will not be passed on to the consumer. The burden does not fall on the customer," she told ANI.

"I provided a clarification on this very point when the issue was raised during the parliamentary session. Spreading misinformation, fueling debates based on it, and using that narrative to attack the government has become a habit for the opposition. This is wrong; there is an effort to spread misconceptions and mislead the public. The public needs to remain vigilant," Sitharaman added.

Also Read: NITI Aayog VC defends UPI merchant fee, says businesses must be self-sustainable

The National Payments Corporation of India (NPCI) introduced a new MDR framework on September 15. Under the framework, a 0.4% MDR will apply to person-to-merchant (P2M) UPI transactions above Rs 2,000, subject to a cap of Rs 300 per transaction.

The government has said that around 96% of P2M transactions will remain unaffected. The MDR will be distributed among participants in the payment ecosystem, including banks and payment application providers. Consumers will continue to use UPI free of cost.

Sitharaman also criticised the mimicry at Congress leader Rahul Gandhi's 'Chhatron Ki Goonj' event in Indore.

"It is in very poor taste and disrespectful to the constitutional position of the Leader of the Opposition to stand with such people and encourage them. While freedom of speech is essential for our democracy, mocking in this manner is in bad taste; the Leader of the Opposition should not have been there encouraging such behaviour," she said.

Responding to allegations by the Aam Aadmi Party (AAP) government that Punjab was being discriminated against in the allocation of funds by the Centre, Sitharaman said no state was being treated in a way that caused it financial loss or undue hardship.

She accused the AAP government of making such allegations to divert attention from its performance.

"I can stand anywhere and state this confidently, looking anyone straight in the eye. There are no cuts or reductions in the funds due to a state based on its entitlements; we release the payments on time," she said.

"Therefore, making such baseless allegations is wrong. Perhaps because elections are approaching in Punjab, they are making such statements to gloss over their own non-performance," she added.

Add as a Reliable and Trusted News Source
Add Now!

(You can now subscribe to our WhatsApp channel)

(You can now subscribe to our WhatsApp channel)

Read More News on
Nirmala SitharamanMerchant Discount RateUPI transactionsMDR chargesNPCIAam Aadmi PartyCongressfinancial allocationP2M UPI transactionsPunjab elections

Enter search text:

Continue reading with one of these options:
Limited Access
Free
Login to get access to some exclusive stories

& personalised newsletters
Login Now

Unlimited Access
Starting @ Rs120/month
Get access to exclusive stories, expert opinions &

in-depth stock reports
Subscribe Now

Unlock Access to All Exclusives with ETPrime FREE TRIAL

15 Days Free: Unlock All ETPrime Exclusives, Market Tools & ePapers

Trial offer expiring in00 : 05 : 00

I'd rather pay ₹2599 now

Uh-oh! This is an exclusive story available for selected readers only.

Worry not. You’re just a step away.

Prime Account Detected!

It seems like you're already an ETPrime member with

Log out of your current logged-in account and log in again using your ET Prime credentials to enjoy all member benefits.

Unlock ETPrime's Exclusive Stories Today!

Subscribe to gain powerful insights on business, stock market and industry trends.

Big Price Drop! Flat 40% Off

Student Only Offer

Already a Member? Sign In now

Already a Member? Sign In now
Already a Member? Sign In now

Offer Exclusively For You

Save up to Rs. 700/-

ON ET PRIME MEMBERSHIP

Avail Offer

Offer Exclusively For You

Get 1 Year Free

With 1 and 2-Year ET prime membership

Avail Offer

Offer Exclusively For You

Get 1 Year Free

With 1 and 2-Year ET prime membership

Avail Offer

Offer Exclusively For You

Get Flat 40% Off

Then ₹ 1749 for 1 year

Avail Offer

Offer Exclusively For You

ET Prime at ₹ 49 for 1 month

Then ₹ 1749 for 1 year

Avail Offer

Special Offer

Get flat 40% off on ETPrime

Avail Offer
Avail Offer

Claim NowAlready a Member? Sign In now

Need Assistance?

Connect with an ETPrime expert for personalized support and guidance

+91 9484700004

' + h3 + '

' + h4 + '

' + listing + '

What’s Included with

ETPrime Membership

1Exclusive Insights That Matter

Uncover the truth with our investigative stories

Make strategic moves using the real-world case studies

Read industry-specific stories to identify emerging trends

Spot opportunities with in-depth insights that matter

Trump temper on H-1B visas is forcing Indians to do these things to stay put in US

What Adani’s US indictment means for India Inc’s overseas fundraising
Why veterans like Reliance, L&T are on acquisition spree? Aswath Damodaran has an answer.

Will China’s dollar bond sale in Saudi Arabia trump the US in financial world?
Huawei launches its own OS to compete with Google and Apple. But can it win beyond China?

The problem with lab grown diamonds
Why a falling rupee is a better option for the economy

A list of top 20 momentum stocks that have delivered massive returns in one year