New Delhi, Sept. 17 -- The Centre will track UPI transactions and merchant pricing on a daily basis from October 15 to check whether sellers pass the newly introduced Merchant Discount Rate (MDR) on to consumers, government officials said on Thursday.
The monitoring comes amid concerns among merchants and customers that the new fee on UPI payments above Rs 2,000 could result in higher prices or greater use of cash. "From October 15, we will monitor on a daily basis whether merchants are passing on the MDR to consumers. Comparisons will be made with last year," a government official said.
Officials said payment aggregators are working with the government to explain the new rules to merchants and clarify which transactions will attract the fee. The existing incentive scheme that subsidises eligible UPI payments of up to Rs 2,000, at a maximum of 0.15 per cent, will end after October 15.
The government expects the revised system to generate around Rs 15,000 crore annually, to be shared among banks, payment service providers and third-party apps. Industry estimates put the annual cost of operating UPI at around Rs 20,000 crore.
Officials also rejected claims that the MDR was introduced because of US pressure. They said the move was intended partly to create revenue opportunities for smaller payment players. "You can keep a system running through subsidies, but that can't ensure innovation," a senior official said. Of more than 24,000 crore UPI transactions in 2025-26, around 30 per cent were person-to-merchant payments, and only 4 per cent of those exceeded Rs 2,000.
Published by HT Digital Content Services with permission from Millennium Post.