Impact of UPI Charges: The central government has decided to implement a 0.4% Merchant Discount Rate (MDR) on UPI payments exceeding ₹2,000, effective from October 15. There is intense debate regarding how this charge will affect the pockets of the common man. While the opposition is continuously attacking the government over this, Finance Minister Nirmala Sitharaman has reiterated that the general public will not be affected.
What is the impact of the UPI charge?
Although the UPI charge will take effect on October 15, reports suggest that its impact is already visible. Shopkeepers and traders are concerned about shrinking margins, and media reports indicate uncertainty at petrol pumps; many pumps are reportedly insisting on cash payments instead of UPI. Such changes will directly impact the common man. However, the true extent of the impact will become clear once the government implements the measure in the coming month.
Finance Minister’s clarification
The opposition continues to criticise the government over the UPI Merchant Discount Rate (MDR) transaction charge. However, the Finance Minister has clarified that this charge does not apply to UPI transactions below ₹2,000. She stated that the government had already provided this clarification when the issue arose during the parliamentary session.
In an interview, the Finance Minister remarked that it has become a habit for the opposition to spread misinformation, fuel debates, and use such narratives to attack the government. Attempts are being made to spread misconceptions and mislead the public; people must be wary of such behaviour.
The charge is not a tax.
The Finance Minister stated that the UPI payment MDR is neither a tax nor a cess. The proceeds will not be deposited into the country’s Consolidated Fund. Rather, the fee is a charge levied by service providers to improve the system and ensure quality service delivery; it is certainly not applicable to small transactions. Furthermore, clarifying the situation, it has been stated that the fee is a charge between operators (MDR) and will not be paid by the consumer.