Days after a feud over ‘Vande Mataram’ with the ally Congress, Jammu and Kashmir Chief Minister Omar Abdullah backed the introduction of a Merchant Discount Rate (MDR) of 0.4 per cent on certain person-to-merchant
UPI payments above Rs 2,000.
Underlining that person-to-person money transfers will not be charged, Abdullah argued that “we don’t appreciate what we get for free”, according to IANS.
“Not everyone is charged. First of all, person-to-person money transfers are not charged. After that, individual consumers will not be charged unless they cross a certain ceiling limit”, he told reporters.
The National Conference (NC) leader argued that running the UPI system across the country required a lot of money.
The new UPI framework introduces a 0.4 per cent merchant discount rate (MDR) on specified merchant transactions above Rs 2,000. However, the government has asserted that customers will not be charged MDR.
“As far as I understand, running this UPI system is not cheap. It takes a lot of money to run it. And the truth is, we don’t properly appreciate what we get for free”.
However, he stressed that the Centre should ensure that the general public is not charged. “If a company is charged, I have no objection because companies make good money through UPI anyway…”
Abdullah’s remarks contrasted with those of the Congress, which raised concerns over the rollout of UPI charges, alleging that the cost would ultimately be borne by common citizens.
The government has introduced a 0.4 per cent MDR on merchant UPI payments above Rs 2,000, with the fee capped at Rs 300 for transactions of Rs 75,000 and above. While the Government has maintained that the charge only applies to merchant payments, critics argue that merchants could eventually pass the additional burden on to consumers through higher prices.
Rahul Gandhi Asks Centre To ‘Roll Back UPI Tax, Now’
Leader of Opposition in the Lok Sabha and Congress MP Rahul Gandhi said Thursday that Prime Minister Narendra Modi has put a tax on every single person by “taxing UPI”.
Modi ji, roll back the UPI tax. Now. pic.twitter.com/IIt46zMgCG
— Rahul Gandhi (@RahulGandhi) September 16, 2026
He posted a video message on X, which he captioned: “Modi ji, roll back the UPI tax. Now”.
LoP Gandhi argued that the new framework would burden every single Indian. “He has put a tax on every single Indian person by taxing UPI and giving huge amounts of money to the United States”.
New MDR To Take Effect From Oct 15
The new MDR will take effect from October 15. However, UPI payments between individuals, including transfers made to friends, will not be charged, according to the Centre.
Responding to the critics and concerns over the new framework, the Union Finance Ministry said banks were asked to ensure merchants do not pass MDR charges on to customers. “UPI application providers are expressly prohibited from imposing platform fees or hidden charges”.
