The Indian government is preparing a strict daily surveillance mechanism to ensure that businesses do not shift the burden of the upcoming Merchant Discount Rate (MDR) onto everyday consumers.
Key Aspects of the Oversight Plan:
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Daily Tracking System: Starting October 15, the Finance Ministry and payment aggregators will actively monitor implementation metrics to track whether merchants are absorbing the costs as intended or illegally transferring them to buyers.
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Strict Prohibition for Sellers: Official guidelines explicitly bar merchants from levying platform fees, surcharges, or passing the new 0.4% MDR directly onto consumer bills.
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Targeted Application: The 0.4% charge applies exclusively to person-to-merchant (P2M) UPI transactions exceeding ₹2,000, which account for a small fraction of transaction volume but a majority of total monetary value. Everyday transfers, smaller transactions under ₹2,000, and micro-vendors receiving up to ₹1 lakh per month remain entirely exempt.
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Protecting Consumer Interests: While banks and payment providers have advocated for transaction fee recoveries to support digital infrastructure, authorities are stepping up outreach and enforcement to shield customers from unexpected checkout fees.
