Keralam Assembly passes resolution asking Union govt. to withdraw MDR charges on UPI transactions

The Keralam Assembly on Thursday passed a resolution urging the Union government to withdraw its decision to levy Merchant Discount Rates (MDR) for UPI transactions exceeding ₹2,000. Two Bharatiya Janata Party (BJP) MLAs opposed the resolution even as the ruling United Democratic Front (UDF) supported the motion moved by Communist Party of India (CPI) MLA K. Rajan.

The National Payments Corporation of India (NPCI) has introduced a charge of 0.4% that most merchants will have to pay banks and payment processors on UPI payments they receive in excess of ₹2,000 per transaction. The implementation of the proposal, which was originally scheduled for October 15, has now been pushed to “immediately after Diwali”.

‘Pro-corporate policies’

Moving the motion, Mr. Rajan said that a digital service which was free for the public for years is gradually being turned into a profit-making mechanism as part of the Narendra Modi government’s ‘pro-corporate economic policies.’ “In 2025-26, as many as 24,162 crore transactions amounting to ₹314 lakh crores were made, which points to the widespread usage of the UPI system by people of all economic backgrounds. Fees are now being imposed on this free digital transaction system as per the trade interests of American companies such as Visa and Mastercard which have been lobbying for this for some years. The Donald Trump government of the U.S. has been exerting pressure on the Union government, saying that the free transactions are affecting the market of the American companies,” he said.

Like a new tax: CM

Chief Minister V.D. Satheesan said that the economic impact of the decision will be akin to levying a new tax. “The levy is being brought in at a time when the economy is under high inflationary pressure. This will increase the cost on businesses. Ultimately, consumers will have to bear it. Small and medium businesses will be affected,” he said.

Opposing the motion, BJP MLA B.B. Gopakumar said that since the fee is being levied only on transactions above ₹2,000, common people or small merchants will not be affected. “Who purchases peanuts for ₹2,000? Which poor person pays ₹2,000 to travel in an autorickshaw?” asked Mr. Gopakumar.