New Delhi [India], September 15 : Congress General Secretary in-charge of Communications and Member of Parliament Jairam Ramesh on Tuesday criticised the Centre over the revised framework for Merchant Discount Rate (MDR) on UPI transactions, alleging that the government announced decisions before finalising the framework.
Taking a swipe at the Centre's decision-making process, Ramesh shared a post on X and alleged that the government first made announcements and subsequently worked on the details of the policy.
He said, “Decision Making in Modi Govt. Aug 6: Hon’ble Finance Minister says “no decision has been taken on MDR. Aug 10: FM in Parliament says “No MDR framework has yet been finalised”. Sep 14: Notification is issued. Within 24 hrs, MDR charges introduced. Another example of Modi Govt’s FAST moves (First Announce, Subsequently Think)”
In another post, the Congress leader alleged that the government was moving towards introducing charges on UPI transactions by using amendments made to the Payment and Settlement Systems Act, 2007.
In a post on X, he said, “Just as we warned on Aug 6, 2026 to which the Hon’ble FM herself had deemed it fit to respond, the Modi Govt is now using new laws bulldozed through Parliament to start the process of charging for UPI. A notification has just been issued under the amended Payment and Settlement Systems Act, 2007 that prohibits banks and providers from charging only for UPI transactions under Rs 2000. But there is NO explicit protection for any transaction above this cap.”
Ramesh further alleged that the move could lead to charges being imposed on other UPI transactions in the future and questioned the government's intent behind the decision.
“The stage is clearly being set for all of us to pay a fee for UPI transactions. Tomorrow the cap itself might be changed with another such notification - there is no longer a guarantee in the law. For all of us, the govt can introduce a charge for daily person-to-person transactions as well. The Modi Govt has yet again shown complete lack of honesty and transparency and has broken the trust of users. Is all of this being done to open digital payments for American companies to appease President Trump?,” he added.
Ramesh's remarks came after the National Payments Corporation of India (NPCI) introduced a revised framework under which UPI transactions above Rs 2,000 will attract a Merchant Discount Rate (MDR) of 0.4 per cent, while consumers will continue to transact free of cost using UPI.
The revised UPI Merchant Discount Rate framework will come into effect on 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.
For instance, a 0.4 per cent MDR on a Rs 2,000 transaction works out to Rs 8. However, the charge is part of the merchant-side MDR framework and the statement said consumers will continue to use UPI free of cost.
The revised framework keeps Person-to-Person (P2P) transactions and P2M transactions up to Rs 2,000 outside the scope of MDR.