UPI MDR debate intensifies: What MobiKwik’s Upasana Taku, BharatPe’s Ashneer Grover and PhonePe’s Sameer Nigam said

The debate over whether Unified Payments Interface (UPI) transactions would remain free for customers has resurfaced, with industry leaders weighing in on the future of the country’s digital payments ecosystem.

This was fueled by the government's recent announcement of a merchant charge on certain UPI transactions above ₹ 2,000.

While Union Finance Minister Nirmala Sitharaman had earlier clarified that consumers would continue to use UPI free of charge, the government reiterated the same in its latest announcement. However, some social media users and industry leaders have expressed a different view.

The revised framework, published on its official website on Tuesday, will come into effect on October 15.

Following the issuance of the revised framework of UPI merchant discount rate (MDR), former BharatPe co-founder Ashneer Grover questioned the move to impose a fee on merchants accepting UPI payments above ₹ 2,000.

Speaking in a TV interview with Times Now , he argued that any levy imposed with respect to UPI payments should clearly be called a “tax”.

When asked about the argument that only those who can “afford” the fee are being asked to pay it , he said that the centre should refer to it as tax. “Why are you calling it a ‘charge’, ‘MDR’, or claiming that it won't affect the customer?”.

Citing an example, Grover asked if an individual would be willing to pay ₹ 500 every month for breathing just because they can “afford” it. “Is there any logic to it?,” he asked. His interview video went viral on social media platforms.

Later in an X (formerly Twitter) post, he also listed some figures to question the move of imposing the merchant fee. Without specifying the period to which the figures related, Grover claimed that the RBI surplus to the government stood at ₹ 2.87 lakh crore, while total listed bank profits stood at ₹ 4.11 lakh crore.

He also said that National Payments Corporation of India ( NPCI ), which is the operator of UPI, reported a pre-tax surplus of ₹ 1,888 crore.

“So, who is facing any loss from UPI and which subsidy is the government paying on UPI?” Grover asked in his X post. He also questioned the rationale for the move by highlighting the high cost of running ATMs and managing cash logistics, suggesting that shutting them down and promoting UPI could be an alternative.

MobiKwik co-founder Upasana Taku criticised those opposing UPI MDR and hailed the move as a “very positive step” that will help make the payments ecosystem more sustainable as rising infrastructure costs have put pressure on banks and payment companies.

“There is no confusion; I want to clarify that everyone in our fintech industry unanimously supports UPI MDR. There are a few individuals who have become very famous but whom we no longer consider fintech founders—their business has shifted focus, and they are mostly engaged in personal branding and self-promotion.