No foreign influence: Govt hits back at ‘external pressure’ charge on UPI fee

“Some claims suggest the change is due to foreign influence. This is false. India’s UPI policy decisions are made independently, with the clear goal of building a self-sustaining, inclusive, and affordable digital payments ecosystem,” the statement said.

WHAT IS THE NEW UPI MDR FEE?

From October 15, UPI transactions over Rs 2,000 will attract an MDR fee of 0.4%. However, the National Payments Corporation of India (NPCI) said this would be paid by merchants, and consumers won’t be affected.

For instance, a merchant will pay Rs 40 when it receives a UPI payment of Rs 10,000. A shopkeeper or an entity receiving more than Rs 1 lakh per month from customers through UPI is categorised as a merchant.

The Centre on Wednesday rejected allegations that the proposed Merchant Discount Rate (MDR) on certain UPI transactions was introduced due to foreign influence or pressure from the United States.

The clarification came after opposition leaders alleged that the move was aimed at appeasing US President Donald Trump. Responding to the claims, the Finance Ministry said India’s decisions on UPI are taken independently and are focused on building a digital payments system that is affordable, inclusive and financially sustainable.

What is the new UPI MDR fee?

Under the new system, UPI transactions above Rs 2,000 will attract an MDR of 0.4 percent from October 15. The fee will be paid by merchants and will not be directly charged to consumers, according to the National Payments Corporation of India (NPCI).

However, the MDR will be capped at Rs 300 per transaction, meaning the fee cannot exceed this amount even for larger payments.

The government said the policy is aimed at supporting the long-term sustainability of India’s digital payments ecosystem while keeping UPI free for consumers.