Opinion | UPI — Facts Vs Falsehoods

For the Congress to now cry wolf and undermine UPI’s integrity is sheer hypocrisy

Regulatory agility combined with political ownership has ensured accountability of India’s digital public infrastructure (DPI). Integration with existing public systems (Aadhaar, Jan Dhan, DBT) has been a huge catalyst in UPI’s phenomenal trajectory. The next chapter of UPI can be as transformative as the first. India’s digital payments story under the Modi government already ranks among the most successful public-policy innovations of the 21st century. UPI is built on an open, interoperable public infrastructure. The fundamental difference between UPI versus, say, Visa or Mastercard, lies in the business model and regulatory philosophy. The Modi government and RBI subsidised the digital ecosystem through incentive schemes so that neither the consumer nor the merchant pays a transaction fee for standard payments. Settlement is near-instant (usually within seconds). Payment gateways may or may not levy a small technology or platform fee sometimes, but the core network cost has been effectively zero to the end user. UPI is, therefore, completely free, safe, and secure, making it unique for all peer-to-peer (P2P) transactions.

What has now changed? Well, P2P transactions continue to be absolutely free irrespective of the value of the transaction. Payments to merchants up to Rs 2,000, along with transactions covered under the zero-MDR framework for small merchants, will also remain free. A nominal MDR of 0.4% will apply only to P2M transactions above Rs 2,000. The MDR will be shared among payment ecosystem participants, including banks, payment service providers, and UPI application providers. For transactions of Rs 75,000 and above, the MDR will be capped at Rs 300 per transaction. Transactions above Rs 2,000 in essential and thin-margin sectors, including railways, telecommunications, insurance, fuel, and agricultural inputs, will attract a flat MDR of just Rs 5 per transaction. The flat charge will provide cost certainty for critical public services and businesses operating on narrow margins.