Government Denies US Influence Over New UPI Merchant Fee Rule
· Business · India Today, Indian Express
The Indian government has rejected claims that the introduction of a Merchant Discount Rate (MDR) on UPI transactions—starting October 15—was influenced by foreign pressure, particularly from the US. The Finance Ministry stated that UPI policy decisions are made independently, with the MDR of 0.4% on transactions over ₹2,000 to be borne by merchants, not consumers. The fee, capped at ₹300 per transaction, applies to entities receiving over ₹1 lakh monthly via UPI. Opposition parties, including Congress, had accused Prime Minister Narendra Modi of yielding to US President Donald Trump’s influence. The government clarified that the move aims to create a self-sustaining digital payments ecosystem, with no foreign interference.
Why it matters
The MDR rule directly impacts small and large merchants nationwide, who will now bear transaction costs for high-value UPI payments, potentially affecting pricing strategies and profit margins. Consumers remain unaffected, but the dispute over foreign influence risks escalating political tensions ahead of upcoming elections, with implications for investor confidence in India’s digital economy.
Read the original report — India Today
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