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UPI MDR changes: Govt debunks 'foreign influence' claims

Digital Desk | New Delhi, Sep 16 (IANS) Finance Ministry on Wednesday debunked claims which suggested that the MDR change in the UPI ecosystem is due to foreign influence, stressing that Indias digital payments decisions are made independently. Since its launch in 2016, UPI has grown into the worlds largest real-time interoperable payment system entirely on Indias own terms, the ministry posted on social media platform X. Such claims are false. Indias UPI policy decisions are made independently, with the clear goal of building a self-sustaining, inclusive, and affordable digital payments ecosystem, it noted. UPI processed 24.5 billion transactions in August 2026 alone. To keep this system self-sustainable, secure and innovative, a small fee on high-value merchant transactions helps fund better infrastructure and cybersecurity, support for small merchants in Tier IIIVI towns and rural areas, and awareness and incentives to expand UPI adoption, according to the government. The new framework ensures resources from higher-value merchant transactions are reinvested to support small businesses and strengthen digital payments across the country, the Finance Ministry said. UPI continues to be free for customers. Sending money to friends, paying at shops, or scanning a QR code all remain without charges. Person-to-Person transfers are always free, regardless of amount. Vendors earning up to Rs 1 lakh per month via UPI QR codes continue to enjoy zero charges. Over 95 per cent of merchant payments are below Rs 2,000 these remain free, said the ministry. Only larger merchant transactions above Rs 2,000 attract a small fee (0.4 per cent) to be borne by merchants, far lower than credit card charges or other network charges. Railways, fuel, telecom, bill payments and insurance have a flat fee of Rs 5 per transaction above Rs 2,000 and mutual fund and securities payments attract just 0.02 per cent, capped at Rs 300. Merchants cannot pass MDR costs to customers. UPI apps cannot levy platform charges, the ministry further informed.

16 Sep 2026 11:55 am