WORLD · VERIFIED DEVELOPMENT
India’s UPI MDR Clarified: No Government Charge, Merchants Cover Fees for Larger Transactions
WHY IT MATTERS
The ruling removes uncertainty over government fees, ensuring consumers pay no extra cost on UPI and clarifying that merchants and banks absorb the majority of transaction charges.
What happened
Finance Minister Nirmala Sitharaman confirmed that the government will not impose a Merchant Discount Rate (MDR) on Unified Payments Interface (UPI) transactions. She explained that for payments exceeding ₹2,000, the MDR will be borne by merchants and banks, not the state.
NPCI official Dilip Asbe noted that about 75 % of UPI transactions are already unaffected by MDR, and that most fees arise from larger businesses that face higher credit‑card charges.
The clarification aims to reassure consumers that UPI remains a low‑cost digital payment option while outlining the cost structure for merchants and banks.
PRIMARY SOURCES
‘Not a government issue’: FM Sitharaman explains where UPI MDR charge goes
The Times of India · SHIVANGHI PAYAL · Discovery only; publisher copyright terms apply
CORRECTIONS & UPDATES
- Revision 1 · Initial ingestion · Sep 25, 2026, 8:15 AM
- Revision 2 · Source update detected · Sep 25, 2026, 8:15 AM