CNN Central News & Network-ITDC India Epress/ITDC News Bhopal: BharatPe co-founder Ashneer Grover has questioned the government over the decision to introduce MDR on large UPI merchant transactions. He described any kind of charge on UPI as being similar to tax collection and said it could affect the digital payments system.
Grover argued that transactions above ₹2,000 may be fewer in number, but their total payment value is quite large. Citing the financial position of the RBI, banks and NPCI, he questioned what kind of subsidy is being provided for UPI whose cost now needs to be recovered through MDR.
According to the government, however, the new MDR is not a charge to be collected from customers. The Finance Ministry has clarified that person-to-person UPI payments will remain completely free. Merchant payments up to ₹2,000 and transactions by eligible small businesses will also remain under the zero-MDR system. A 0.4% MDR will apply to specified merchant transactions above ₹2,000, while for transactions of ₹75,000 or more, the maximum limit will be ₹300. The new MDR framework is scheduled to come into effect from 15 October 2026. The government says its objective is to make the UPI ecosystem financially sustainable.
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