Sitharaman Asserts Consumers Shielded from UPI Transaction Fees
Finance Minister Nirmala Sitharaman clarified that the Merchant Discount Rate on UPI payments will not be passed on to end users, aiming to preserve the low‑cost digital payment ecosystem. The statement has steadied markets and reassured merchants wary of fee erosion.
In a televised briefing, Sitharaman emphasized that the regulatory framework mandates banks to absorb the MDR, preventing any surcharge on consumers. This reassurance arrived as fintech firms warned of potential price inflation that could deter digital adoption. The clarification eases tensions between the Reserve Bank, payment processors, and merchant associations, all of whom had been lobbying for a transparent fee structure. Analysts note that the policy sustains the momentum of cashless transactions, a cornerstone of the government's financial inclusion agenda. Looking ahead, the government may introduce periodic reviews of the MDR to balance bank profitability with consumer protection, potentially shaping the competitive dynamics of India's payments .
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