BJD MP Santrupt Misra has strongly criticised the Centre's new 0.4 per cent Merchant Discount Rate on UPI transactions above Rs 2,000, arguing for alternative funding mechanisms to support India's crucial digital payment ecosystem.
Key Points
- BJD MP Santrupt Misra criticises the Centre's 0.4% MDR on UPI transactions over Rs 2,000.
- Misra suggests the government could fund the UPI network using a portion of the RBI's Rs 2.86 lakh crore dividend.
- He also proposes that NPCI's shareholder banks, which made Rs 2.5 lakh crore profit, could contribute to the digital infrastructure.
- Misra warns that the MDR fee will either reduce merchant profits or be passed on to consumers, contrary to government claims.
- The new 0.4% MDR fee on UPI payments above Rs 2,000 for merchants is set to be implemented from October 15.
Biju Janata Dal (BJD) MP Santrupt Misra raised concerns on Saturday about the Centre's decision to impose a merchant discount rate (MDR) of 0.4 per cent on person-to-merchant UPI transactions of above Rs 2,000, saying various alternative avenues are available to fund and support the digital-payment system.
Understanding The UPI MDR Controversy
Misra said the government could have easily borne the cost of maintaining the UPI network.
"In 2025-2026, the RBI (Reserve Bank of India) gave a dividend of Rs 2.86 lakh crore to the government. A small part of this could have been kept aside for the digital-transaction infrastructure," the Rajya Sabha MP from Odisha said at a press conference at the Constitution Club here.
He also highlighted that the National Payments Corporation of India (NPCI), which operates UPI, has large financial banks and platforms as its shareholders and promoters.
These banks made a profit of Rs 2.5 lakh crore last year and could have contributed a small part of that amount for the digital-transaction infrastructure, Misra said.
He said introducing a 0.4-per cent fee would force merchants to either reduce their profit margins or pass it on to consumers.
"The government says the MDR will not impact consumers. But this is a complete misunderstanding of economics," Misra said.
The 0.4-per cent fee on UPI payments of more than Rs 2,000 made to merchants will be applicable from October 15.
