The Biju Janata Dal (BJD) has opposed the Centre decision to introduce a 0.4 percent Merchant Discount Rate (MDR) on certain UPI payments above Rs 2,000. BJD Rajya Sabha MP Santrupt Misra said the government should find other ways to support the cost of India digital payment system instead of putting an additional burden on merchants.
The new MDR will apply to person to merchant (P2M) UPI transactions above Rs 2,000 from October 15, 2026. According to the government, UPI payments between individuals will continue to remain free. Payments to merchants up to Rs 2,000 will also remain free, and the government says around 96 percent of P2M transactions will not be affected.
Misra said the new charge could reduce the profit margins of shopkeepers and merchants. He also said there could be a possibility of the cost eventually reaching consumers through higher prices. The BJD leader suggested that the government could use part of its financial resources to support digital payment infrastructure.
Misra also pointed to banks and other platforms connected with the National Payments Corporation of India (NPCI), which operates UPI. He argued that these institutions could contribute towards maintaining the digital payment network. The government, however, says the new framework is meant to create a sustainable financial model for UPI while keeping most everyday digital payments free.
