Government sources today emphasised that Merchant Discount Rate (MDR) on person-to-merchant UPI transactions above two thousand rupees is not a Cess or Surcharge. Sources said not a single rupee of MDR goes to the Government.

They said that MDR stays within the payment ecosystem and around 96 percent of all UPI merchant transactions remain unaffected. Sources added that the customer does not pay MDR and banks have been advised to ensure that merchants do not pass it on to customers. Maximum Retail Price (MRP) of a product stays the same whether paid by debit card or UPI.