The Biju Janata Dal (BJD) on Saturday rejected the Centre’s decision to impose a 0.4 per cent merchant discount rate (MDR) on person-to-merchant UPI transactions above Rs 2,000, with Rajya Sabha MP Santrupt Misra saying the government should explore other ways to fund the digital-payment infrastructure.The charge will come into effect from October 15 and, according to Misra, could either cut merchants’ profit margins or eventually be passed on to consumers.Misra said the government could have borne the cost of maintaining the UPI network instead of introducing the charge.
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“In 2025-2026, the RBI (Reserve Bank of India) gave a dividend of Rs 2.86 lakh crore to the government. A small part of this could have been kept aside for the digital-transaction infrastructure,” the Odisha MP said at a press conference at the Constitution Club here.He also pointed to the financial position of banks and platforms that are shareholders and promoters of the National Payments Corporation of India (NPCI), which operates UPI.
BJD warns of impact on merchants
According to Misra, these banks made a combined profit of Rs 2.5 lakh crore last year and could have contributed a small portion towards maintaining digital-payment infrastructure.He rejected the government’s position that the MDR would not affect consumers.“The government says the MDR will not impact consumers. But this is a complete misunderstanding of economics,” Misra said.The 0.4 per cent MDR will apply to UPI payments above Rs 2,000 made to merchants from October 15.
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