New Delhi [India], September 16 (ANI): Union Minister for Communications Jyotiraditya M Scindia on Wednesday reassured consumers amid debates over digital payment fees, making it clear that any attempt by merchants to pass on the costs of the Merchant Discount Rate (MDR) on transactions done through Unified Payments Interface (UPI) to customers would violate the law and constitute a criminal offence.
Union Minister Scindia addressed queries regarding concerns that merchants might transfer a 0.4 per cent MDR transaction fee onto end-users. He emphasised that the government has neither recommended nor permitted any such levy on citizens.
"There is no recommendation to levy this on the customer. Doing so would violate the law and amount to a criminal offence," the Union Minister told ANI.
Reiterating the Centre's commitment to safeguarding the interests of the common public, Scindia said that consumers would remain completely insulated from transaction costs on digital payments.
"This will never be imposed on the customer or the common man. You cannot impose this on our consumer," he affirmed.
The Union Minister's comments come shortly after the Leader of the Opposition in the Lok Sabha, Rahul Gandhi, alleged that Prime Minister Narendra Modi has "lied down due to American pressure" and imposed a "tax" on UPI.
In a video message posted on X, Rahul Gandhi said, "Indira ji was once asked whether she leans left or right, and her response was, 'I don't lean left, I don't lean right, I stand straight.' Modi ji has a completely different concept. He's neither left nor right; he has decided to lie down straight and prostrate himself in front of Donald Trump. He's put a tax on every single Indian person by taxing UPI and giving a huge amount of money to the United States. Modi ji, please stop lying down in front of the United States. Have a spine, stand up and take back the UPI tax."
The Centre has clarified that MDR is neither a tax nor a charge collected and is distributed among payment ecosystem participants, including banks and payment application providers, to support the operation and continued expansion of the UPI ecosystem
The National Payments Corporation of India (NPCI) on Tuesday introduced a new Merchant Discount Rate (MDR) framework, under which UPI merchant transactions above Rs 2,000 will attract an MDR of 0.4 per cent, while consumers will continue to transact free of cost using UPI.
The revised UPI MDR framework will come into effect from October 15, 2026, and will apply to select merchant transactions.
Under the new framework, an MDR of 0.4 per cent will apply to Person-to-Merchant (P2M) UPI transactions above Rs 2,000, with the MDR capped at Rs 300 per transaction.
The government has said that the new UPI framework introduced has no impact on any person-to-person transactions.
It said that UPI will continue to remain completely free for all person-to-person transactions, irrespective of the amount transferred.
Approximately 96% of all P2M transactions will remain unaffected. MDR will apply only to specified merchant transactions above Rs 2,000. (ANI)
"Will violate law, amount to criminal offence": Jyotiraditya Scindia says UPI MDR charges can never be passed on to consumers
