Union Finance Minister Nirmala Sitharaman on Monday said Merchant Discount Rate (MDR) charges on eligible UPI transactions will not be passed on to consumers.
Speaking to ANI, Sitharaman said MDR is a charge within the payment ecosystem and is not a tax or cess. She said the charge would be borne within the ecosystem and not by customers making UPI payments.
The comments come after the government and NPCI introduced a revised framework under which a 0.4 per cent MDR applies to specified Person-to-Merchant (P2M) UPI transactions above Rs 2,000, subject to a cap of Rs 300 for transactions of Rs 75,000 and above. The government has clarified that customers will not be charged MDR and that banks have been advised to ensure merchants do not pass the charge on to customers.
The government has also said that around 96 per cent of P2M UPI transactions will remain unaffected, while all Person-to-Person (P2P) transactions will continue to remain free.
Sitharaman said she had clarified the issue in Parliament as well. She also accused opposition parties of spreading misconceptions about the new framework and urged the public to remain vigilant.
According to the revised framework, MDR is distributed among participants in the payment ecosystem, including banks, payment service providers and UPI application providers.
Sitharaman also criticised the mimicry involving Congress leader Rahul Gandhi at the ‘Chhatron Ki Goonj’ event in Indore. She said such conduct was 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 are provided funds according to their entitlements and that payments are released on time.
She rejected the allegations and said the claims were being made to deflect attention from the state government’s performance. She also linked the allegations to the upcoming Punjab elections. (ANI)
