Top News

New Delhi. The debate over UPI payments has once again intensified. Following a proposal in Parliament, discussions have begun that in the future, certain transactions conducted through UPI may be subject to a Merchant Discount Rate (MDR). Several business organizations, including the Congress, have expressed opposition to this issue. Now, former BharatPe co-founder Ashneer Grover has also advised the government to reconsider this decision.

Ashneer Grover expressed concern about MDR on the social media platform X. He stated that UPI is one of India’s digital achievements, functioning smoothly and without any major problems. Therefore, imposing any charges on it could harm the use of digital payments. He called it a “retrograde step” and urged the government to reconsider the decision.

The Lok Sabha has approved the Taxation and Other Laws (Amendment) Bill, 2026. This bill amends the law governing payment and settlement systems. Although no MDR has been implemented on UPI since this law, its purpose is to create a legal provision that allows the government to amend the current zero-MDR system through a notification. This means that no new charges have been imposed on UPI payments at this time, but legislation could pave the way for implementing MDR in the future. Discussions have begun within political parties, businesses, and the digital payments industry regarding this possibility.

Finance Minister clarifies: MDR will not be charged from customers

Amidst the ongoing debate surrounding UPI and various reports surfacing on social media, Finance Minister Nirmala Sitharaman clarified the situation. She stated that MDR has not been implemented yet, and the government has not taken any decision to implement it. According to Sitharaman, if MDR is implemented in the future, it will be paid by merchants. It will not directly impact UPI transactions for ordinary customers.

The Finance Minister also stated that banks and fintech companies can use the resources generated from MDR to invest in payment system infrastructure, security, and new technology. This could benefit UPI users in the future.

Decision still pending, system to decide further process

According to the government, a final decision on implementing MDR on UPI has not yet been made. Further proceedings on this issue will proceed only after the relevant provisions are passed by Parliament and the UPI and Services Governance Committee, chaired by the NPCI.

This is why, for now, there is no mention of any new charges for ordinary UPI users. However, whether or not an MDR system will be implemented in the future, and what form it will take if implemented, remains unclear. Meanwhile, a survey has claimed that if fees are imposed on UPI transactions, its usage could decline by more than 50 percent. Those involved in digital payments are also expressing concern about this possibility.