Internet/Hyderabad, Sept 16 (Maxim News): The war of words between the ruling and opposition parties over the UPI MDR decision continues. While the Congress has alleged that there is pressure from the US behind the Center’s decision, the Center has rejected those statements. It has clarified that the decision to impose a new Merchant Discount Rate (MDR) for UPI transactions is not under any pressure from anyone. The Finance Ministry has explained that India will take independent decisions on digital payment policies. It has been stated that the new policy aims to make the UPI system sustainable in the long term and financially.
MDR will come into effect on certain merchant-to-merchant (P2M) UPI transactions from October 15. Eligible transactions above Rs 2,000 will be subject to a 0.4 per cent MDR. The maximum per transaction will be Rs 300. However, the government has made it clear that this fee should not be collected directly from consumers. Person-to-person (P2P) UPI transfers will continue to be completely free. Merchant payments up to Rs 2,000 and certain transactions applicable to small traders will also be exempt from MDR. The Centre has said that about 96 per cent of P2M transactions will not fall under the ambit of this new MDR.
However, the Congress has strongly objected to this MDR policy. Congress leader Jairam Ramesh alleged that the Center has bowed to the US demand and that the intention behind changing the zero MDR on UPI so far is to benefit US card networks. Congress alleged that the US Trade Representative’s office had previously expressed objections to UPI being free, which is why this decision was taken. Congress leaders also mentioned trade relations with the US, tariffs proposed by the US on energy imports from Russia, and H-1B visa issues. However, the government did not accept the evidence that these were related to the UPI MDR decision. (Maxim News)
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