Reconsider Proposed MDR Framework for UPI Transactions: Prafulla Chandra Ghadai .

Jajpur,20/09(PPT ): Former Odisha Finance Minister Dr Prafulla Chandra Ghadai has urged the Centre to reconsider the proposed Merchant Discount Rate (MDR) framework for certain Unified Payments Interface (UPI) transactions, saying the move could increase the cost burden on small traders and affect the wider digital payments ecosystem. Under the framework announced by the National Payments Corporation of India, a 0.4 per cent MDR will apply from October 15 to specified person-to-merchant UPI transactions above ₹2,000, with the charge capped at ₹300 for transactions of ₹75,000 and above. Person-to-person transfers will remain free, while merchant payments up to ₹2,000 and transactions covered under the zero-MDR framework for small merchants will also remain free. The Union Finance Ministry has clarified that customers will not be charged the MDR directly.
Dr Ghadai, in a press statement, said the interests of ordinary consumers, small traders and people dependent on digital transactions should be considered before implementing the framework. He said additional costs faced by merchants could have wider implications for businesses and consumers and urged the Centre to review the policy in the larger public interest. His remarks come amid concerns raised by sections of the trading community in different parts of the country. The government, however, has said the framework is aimed at ensuring the long-term sustainability of the UPI ecosystem while protecting individuals and small merchants from additional charges. According to the Finance Ministry, about 96 per cent of person-to-merchant UPI transactions will remain unaffected, while a flat ₹5 MDR will apply to specified transactions above ₹2,000 in essential and thin-margin sectors such as fuel, telecommunications, insurance and railway services.