No foreign influence: Govt hits back at 'external pressure' charge on UPI fee

The government has rejected the opposition's charge that the introduction of a Merchant Discount Rate (MDR) on UPI payments was intended to benefit American card companies.The Congress has slammed the new UPI move, accusing PM Modi of giving in to US pressure.The Centre on Wednesday rejected claims that the introduction of a Merchant Discount Rate (MDR) on UPI payments was driven by foreign influence, after the opposition alleged that the move was aimed at appeasing US President Donald Trump. Clearing the air over the allegations, the Finance Ministry said India's UPI policy decisions were made "independently", and it would continue to remain free for consumers."Some claims suggest the change is due to foreign influence. This is false. India's UPI policy decisions are made independently, with the clear goal of building a self-sustaining, inclusive, and affordable digital payments ecosystem," the statement said.WHAT IS THE NEW UPI MDR FEE?From October 15, UPI transactions over Rs 2,000 will attract an MDR fee of 0.4%. However, the National Payments Corporation of India (NPCI) said this would be paid by merchants, and consumers won't be affected. For instance, a merchant will pay Rs 40 when it receives a UPI payment of Rs 10,000. A shopkeeper or an entity receiving more than Rs 1 lakh per month from customers through UPI is categorised as a merchant.The MDR fee, however, has been capped at Rs 300 per transaction. Amid criticism from the opposition, which has sought its rollback, the Centre reiterated that "person-to-person transfers" would always remain free.Separately, the Finance Ministry said banks have been advised to ensure merchants do not pass on the cost to customers. "Sending money to friends, paying at shops, or scanning a QR code - all remain without charges," the statement said.- EndsPublished By: Abhishek DePublished On: Sep 16, 2026 14:55 IST