Finance Minister Nirmala Sitharaman said the proposed 0.4% Merchant Discount Rate on specified UPI person-to-merchant transactions above Rs 2,000 is not a tax, cess, or surcharge and will not accrue to the government. The fee is an ecosystem charge shared among banks, gateways, UPI apps and sponsors, capped in high-value cases, exempting most small merchants, and intended to sustain payment infrastructure and innovation.
