New Delhi, Sept. 25 -- The proposed Merchant Discount Rate (MDR) on certain UPI payments above Rs.2,000 has raised concerns among users, merchants, and other stakeholders. To quell such concerns, Finance Minister Nirmala Sitharaman has now clarified that the charge will be levied on merchants and will not be passed on to consumers.

According to a PTI report, Sitharaman said on 25 September that "the MDR is not a tax, cess or surcharge, and that the money collected will not go to the government".

In accordance with the new framework, a 0.4% will apply starting from 15 October 2026 to specified person-to-merchant UPI transactions above Rs.2,000. Furthermore, the charge is capped at Rs.300 for transactions of Rs.75,000 or more. Person-to-p...