Sitharaman Clarifies MDR Applies to Merchants, Not Customers, in UPI Bill Row

The bill would amend Section 10A of the Payment Act, replacing fixed zero-MDR rules for UPI and RuPay with government notification powers. Ramesh argued this ends statutory fee-free protection for users and could burden customers, citing RBI's ₹2.86 lakh crore surplus transfer for 2025-26 as a funding alternative. He also linked the change to external pressure, referencing the US Trade Representative's 2026 report and naming Visa and Mastercard, suggesting Donald Trump may have influenced the decision.

Sitharaman clarified that MDR would apply only to merchants, not customers, and would support banks and fintech investment. She noted implementation remains undecided, with the NPCI-led steering committee to decide MDR specifics after the bill passes. Social media users reacted sarcastically, with one joking about GST on selling a kidney and others debating merchant cost pass-through. The Modi government's claim that this is the only way to keep UPI financially sustainable is entirely wrong.