Kumari Selja opposes UPI MDR and questions the move to levy a 0.4% charge on selected merchant payments above Rs 2,000
CHANDIGARH | PEN OF DEMOCRACY NEWS DESK
Sirsa MP and Congress national general secretary Kumari Selja has opposed the new Merchant Discount Rate (MDR) framework for selected UPI merchant payments above Rs 2,000, arguing that the additional cost could ultimately affect small traders and consumers. The new framework is scheduled to take effect from October 15, 2026.
Selja questions the need for UPI charges
Selja said the Centre first encouraged citizens and businesses to adopt digital payments and UPI as a convenient, low-cost system, and has now opened the door to charges on selected higher-value merchant transactions. She questioned why a payment system promoted for years as accessible and public-friendly now needs an MDR framework.
Under the new framework, a 0.4% MDR will apply to eligible person-to-merchant UPI payments above Rs 2,000, with the charge capped at Rs 300 for transactions of Rs 75,000 and above. Person-to-person transfers and eligible small merchants receiving up to Rs 1 lakh per month through UPI QR payments remain exempt. The government has also said the MDR is a merchant-side charge and should not be passed directly to customers.
KEY POINTS
• MDR of 0.4% applies to eligible UPI merchant payments above Rs 2,000 from October 15, 2026.
• The MDR is capped at Rs 300 per transaction for payments of Rs 75,000 and above.
• P2P UPI transfers and eligible small merchants receiving up to Rs 1 lakh a month through UPI QR remain exempt.
• A Rs 3,000 payment would mean Rs 12 MDR, while Rs 50,000 would mean Rs 200 before the applicable cap.
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Concerns over impact on traders and prices
Selja said that although the government describes MDR as a charge on merchants rather than consumers, increased transaction costs could, in her view, eventually be reflected in the prices of goods and services. She cited the example that a Rs 3,000 merchant payment would attract Rs 12 MDR and a Rs 50,000 payment would attract Rs 200 under the 0.4% rate.
She said small shopkeepers are already dealing with inflation, weaker demand, GST compliance requirements and rising operating costs. According to her, some traders could become reluctant to accept larger UPI payments or could ask customers to use cash, which she warned could undermine the broader objective of expanding digital payments.
Questions on implementation and small merchants
Selja sought clarity on how eligible small merchants will be identified and how the Rs 1 lakh monthly UPI receipt threshold will be monitored. She also asked what process will apply when a merchant crosses the exemption limit and what consultations were held with banks, payment companies, traders and other stakeholders before the framework was finalised.
Reference to Rahul Gandhi’s criticism
Selja also referred to earlier criticism by Leader of Opposition Rahul Gandhi, who has questioned the introduction of charges in the UPI ecosystem and raised questions about the role of American companies and external pressure in digital payments policy. Selja said the Centre should clarify the basis of the policy and the consultations behind it.
Selja demands withdrawal of proposed MDR
Selja demanded that the Centre withdraw the proposed MDR on merchant UPI payments and keep digital payments free. She described UPI as an important instrument for public convenience and financial inclusion and said it should not become a source of additional economic burden for ordinary users and small businesses.
Selja’s September 18–20 programme
According to the programme shared with the statement, Selja will travel to Assandh, Panchkula, Kalka and Sirsa from September 18 to 20. On September 18, she is scheduled to attend the Block Congress convention at GS Farm in Assandh, followed by programmes at Prabhu Sweets in Barwala and Aggarwal Bhawan in Sector 16, Panchkula. On September 19, she will attend the Block Kalka Congress convention at KK Farm in Pinjore.
On September 20, she is scheduled to visit the residence of martyr Sukhsain Singh in village Kuttabad to pay tribute, attend a Bhakti Satsang at the New Grain Market in Sirsa, meet members of the public at the PWD Rest House in Sirsa and participate in a Block Congress convention at SD Mahila College in Narwana.
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