Government says UPI merchant charge is not a tax or surcharge

The Indian government and the National Payments Corporation of India have said that the merchant discount rate, or MDR, is a merchant-side payment-processing charge rather than a tax, cess or surcharge, NDTV reports. NPCI operates the Unified Payments Interface, the digital payments system referred to in the report. The clarification addresses the classification of MDR and distinguishes it from government-imposed charges.

The supplied material does not state whether a new fee has been introduced or whether the government is considering changes to UPI pricing. It also does not identify the types of transactions, merchants or payment providers that would be affected by any specific proposal. No further details are provided about how MDR is calculated, who pays it in individual transactions or whether consumers would bear any resulting cost.