The new UPI merchant fee framework has triggered debate among businesses and digital-payment users. BharatPe co-founder Ashneer Grover has reacted to the revised Merchant Discount Rate (MDR), arguing that merchants may eventually pass the cost on to consumers.
Under the new rules, selected UPI payments made to merchants above ₹2,000 will attract an MDR of 0.4%. The charge will be capped at ₹300 for a single transaction.
What is changing for UPI payments?
The revised framework does not introduce a fee for every UPI transaction.
Person-to-person payments will continue to remain free, regardless of the transaction amount. Merchant payments of up to ₹2,000 will also remain free.
The government has said that about 96% of merchant transactions will remain unaffected by the new framework.
The new MDR will apply only to specified merchant transactions above the ₹2,000 threshold. It is a charge within the payment ecosystem and is distributed among participating banks and payment service providers.
Ashneer Grover raises consumer-cost concern
Reacting to the development, Grover questioned whether merchants could eventually recover the additional payment cost from customers.
His argument focuses on the possibility that businesses could adjust prices or add costs elsewhere to offset the MDR.
However, the government has clarified that customers will not directly pay MDR. It has also rejected describing MDR as a tax, stating that it is neither a government tax nor a charge collected by the government or NPCI.
The revised UPI merchant fee framework is scheduled to come into effect from October 15, 2026.
Read Also:
US F-1 Student Visa Rules 2026: Key Changes
Follow Us on Instagram: bh24newsweb
