BJP defends UPI MDR, NCP(SP) criticises charge on transactions above Rs 2,000

The BJP defended the new 0.4 per cent MDR on select UPI merchant transactions above Rs 2,000, while NCP(SP) criticised the move. The reactions followed NPCI’s announcement of the framework, which keeps person-to-person payments free.

New Delhi: Political reactions have emerged over the introduction of a 0.4 per cent charge on certain UPI merchant transactions exceeding Rs 2,000, with the BJP defending the digital payments ecosystem while the NCP(SP) criticised the move.

Reacting to the proposed charge, BJP MP Anurag Thakur said India’s digital payments system had gained international recognition and highlighted its widespread use among small businesses and individuals.

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“India’s digital transactions are now cited as an example across the world. Prime ministers and presidents of major countries come to India and see how easily even a roadside vendor, tea seller, small shopkeeper, and individuals can make payments through digital transactions,” Thakur said.

The BJP MP also criticised the Congress over its response to the development and called for a detailed examination of the report.

“I think the Congress’ only job is to mislead people and criticise. I believe this report needs to be studied in greater detail and examined seriously,” he said.

Thakur further pointed to the exemption for transactions up to Rs 2,000 and said, “You do not have to pay anything on transactions up to Rs 2,000, and there is no transaction charge on 96 per cent of items even above that amount…”

NCP(SP) leader and National Spokesperson, Clyde Crasto, criticised the Centre over the charge and argued that merchants could ultimately pass the additional cost on to consumers.

“The Bharatiya Janata Party government at the Centre has found yet another way to trouble people. Now they are saying that a tax will be imposed on UPI transactions,” Crasto said.

“If a person makes a purchase, the shopkeeper will have to pay the tax. And they say that the shopkeeper will pay this tax. Tell me, which shopkeeper will pay it out of his own pocket? Why would he take that burden? Somewhere, he will find a way to pass that burden on to the customer who is making the purchase,” he added.

The reactions follow a circular issued by the National Payments Corporation of India (NPCI) on Tuesday, regarding charges applicable to certain UPI merchant transactions.

According to the circular, NPCI has introduced a charge of 0.4 per cent that most merchants will have to pay to banks and payment processors on UPI payments they receive in excess of Rs 2,000 per transaction.

The issue is particularly significant given the widespread adoption of UPI for everyday payments, including transactions involving small retailers, vendors and other merchants.