New Delhi, September 16, 2026 (Yes Punjab News)
Political reactions have emerged over the introduction of a 0.4 per cent Merchant Discount Rate (MDR) on specified UPI merchant transactions above Rs 2,000, with BJP MP Anurag Thakur defending the digital payments ecosystem and NCP(SP) spokesperson Clyde Crasto criticising the move.
The new framework applies only to specified person-to-merchant (P2M) transactions above Rs 2,000. The government has clarified that person-to-person UPI transactions will remain completely free, while around 96 per cent of merchant transactions will also remain unaffected. MDR is a charge within the payment ecosystem and is not a tax collected by the government or NPCI.
Thakur said India’s digital payments system had gained international recognition and highlighted its widespread use among small businesses, street vendors and individuals.
“India’s digital transactions are now cited as an example across the world,” Thakur said, pointing to the ease with which roadside vendors, tea sellers and small shopkeepers accept digital payments.
He also criticised the Congress for its response to the issue and said the relevant report should be examined in greater detail. Referring to the Rs 2,000 threshold, Thakur said transactions up to that amount would not attract MDR and claimed that most transactions above the threshold would also remain outside the charge framework.
Crasto, however, argued that even though MDR is formally imposed within the merchant payment ecosystem, merchants could ultimately seek to recover the cost from customers.
“The shopkeeper will have to pay the tax. And they say that the shopkeeper will pay this tax. Tell me, which shopkeeper will pay it out of his own pocket?” Crasto said, arguing that the additional cost could eventually be passed on to consumers.
Under the framework, MDR of 0.4 per cent will apply to specified P2M transactions above Rs 2,000, with a cap of Rs 300 for transactions of Rs 75,000 and above. The government has also said banks have been advised to ensure merchants do not pass MDR charges on to customers.
The debate comes amid the growing use of UPI, which had 55.49 crore users on the platform as of June 2026, according to government data.
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