The Aam Aadmi Party (AAP) staged a protest in Jalandhar against the new Merchant Discount Rate (MDR) framework for certain high-value UPI merchant transactions, accusing the Centre of putting an additional burden on traders.
The protest comes after the National Payments Corporation of India (NPCI) announced that a 0.4% MDR will apply to select person-to-merchant (P2M) UPI transactions above ₹2,000 from October 15, 2026. The charge will be capped at ₹300 for transactions of ₹75,000 or more, while person-to-person payments and P2M transactions up to ₹2,000 will remain outside the MDR framework.
AAP workers protest against UPI charges
During the demonstration, AAP workers raised slogans against the BJP-led Centre and burnt an effigy of Prime Minister Narendra Modi to register their opposition to the proposed MDR.
The protest was attended by Jalandhar North constituency in-charge Vaneet Dhir, district president Amritpal, Adampur constituency in-charge Pawan Kumar Tinu and Jalandhar Cantonment in-charge Rajwinder Kaur Thiara, along with a large number of party workers.
Pawan Tinu questions impact on small traders
Former MLA Pawan Kumar Tinu alleged that the government first encouraged people and businesses to shift towards digital payments and was now introducing charges on certain merchant transactions.
He claimed that the move could increase the financial burden on small traders who increasingly depend on digital payments. Tinu also alleged that the policy would benefit large businesses and international companies.
However, the new MDR is not a direct tax on customers. Under the announced framework, the charge is to be borne by merchants, while the Centre has advised banks and payment-system participants not to pass the cost on to consumers.
AAP raises political issues over Punjab
During the protest, Tinu also commented on BJP national president Nitin Nabin's proposed Punjab visit, questioning the BJP's record on issues including drugs and governance.
He highlighted what he described as the Punjab government's work on electricity, education and action against drugs, while also making allegations regarding the situation in other states and the role of central agencies.
These remarks were made as part of the political protest and represent AAP's position on the issues.
What changes for UPI users?
Under the new framework, P2M UPI payments above ₹2,000 will attract a 0.4% MDR, subject to the applicable exemptions and caps. A ₹10,000 merchant transaction, for example, would carry an MDR of ₹40. Transactions between individuals will continue to remain free.
The proposed framework has triggered debate among traders and political parties, with supporters of the change arguing that MDR can help support the long-term sustainability of the UPI payment ecosystem, while critics have raised concerns about its impact on merchants.
