Bhubaneswar, Sep 18: Leader of Opposition and BJD president Naveen Patnaik on Friday raised concerns over the newly announced 0.4% Merchant Discount Rate (MDR) on specified UPI merchant transactions above ₹2,000, stressing that the interests of common people and small traders should be protected.
Patnaik made the remarks while responding to media queries at Biju Patnaik International Airport in Bhubaneswar amid a political debate over the revised UPI payment framework.
The issue has also drawn criticism from the Odisha Congress. Senior Congress leader Sonali Sahoo alleged that the proposed MDR could increase the burden on workers, labourers and small traders. She also alleged that external pressure had influenced the decision, linking the issue to representations by international payment companies. These claims are political allegations and have not been independently established.
The National Payments Corporation of India (NPCI) has announced that a 0.4% MDR will apply to specified person-to-merchant (P2M) transactions above ₹2,000, with the framework scheduled to take effect from October 15, 2026. The MDR is a charge within the merchant payment ecosystem and is not a direct fee on customers.
The Union Finance Ministry has clarified that person-to-person UPI transactions will remain completely free, irrespective of the amount transferred. Merchant payments up to ₹2,000 and transactions covered under the zero-MDR framework for small merchants will also remain free. The ministry said around 96% of P2M transactions will remain unaffected.
The government has further clarified that customers will not be charged MDR, while the rate for specified merchant transactions above ₹2,000 will be shared among participants in the payment ecosystem.
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