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A political showdown has erupted over the introduction of a 0.4% Merchant Discount Rate on select UPI transactions above 2,000 rupees.
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00:00Good evening, you're watching NewsTrack with me, Maria Shakil.
00:04The UPI fee rao has turned into a massive political flashpoint.
00:09So what all has happened today?
00:12The Congress has called the 0.4% MDR on transactions above Rs. 2000 a Modi tax and has alleged
00:20foreign pressure.
00:22Leader of Opposition in Lok Sabha, Rahul Gandhi, wants Prime Minister Modi to roll back what he calls the UPI
00:29tax.
00:30The Finance Ministry has now rejected that charge, saying there is no foreign influence and that India's UPI policy is
00:38decided independently.
00:40The Ministry says the fee is about making UPI self-sustaining, secure and innovative and has insisted that MDR is
00:50neither a tax nor a government charge.
00:54And while the Retailers Association has raised concerns, fintech founders and industry voices have welcomed this move.
01:03So as the political sparring continues, the question is whether this new model can help UPI free for users while
01:12making the ecosystem financially sustainable.
01:17Before I bring in the big news maker on the show tonight, take a look at what happened today.
01:30MDR Maha Drama over Rules
01:33A 0.4% merchant fee on select UPI payments above Rs. 2000 has triggered a bitter political war of
01:43words.
01:45Congress has called it a Modi tax, accusing the centre of putting the cost of UPI on merchants and eventually
01:52the armed army.
01:55Leader of Opposition Lok Sabha, Rahul Gandhi, has demanded a rollback, telling Prime Minister Narendra Modi to have a spine
02:02and has alleged that the move is linked to U.S. pressure.
02:09He's put a tax on every single Indian person by taxing UPI and giving huge amount of money to the
02:17United States.
02:18Modi ji, please stop lying down in front of the United States.
02:22Have a spine.
02:23Khaade ho jaiye.
02:24Or UPI tax ko haapes leechye.
02:30His party workers continued the attack, mocking Prime Minister Modi with the slogan, Pay PM.
02:40There are over 604 crore UPI commercial transactions that happened in the last fiscal year, which were over Rs. 2000.
02:50The total value of that transaction is Rs. 66.22 lakh crore.
02:57That's the quantum of money that the tax will be levied on.
03:01That's the quantum of money that has been put into the pockets of American companies at the cost of ordinary
03:07Indians.
03:09But the centre has countered Congress's foreign influence charge, saying that India's UPI policy decisions remain independent.
03:17And that the fee on large transactions will help strengthen the digital payment system.
03:25The BGB has also accused the Congress of misleading the people and has questioned the party's sudden love for UPI.
03:35The BGB has also accused the government of the company of the government of the U.P.I.
03:35When the U.P.I. was begun, it's an issue for the people who were working on the U.P
03:40.I.
03:40The initiative does not have to be successful in any way.
03:42The U.P.I. has succeeded in a way, then our street vendors who were involved were also involved in
03:47the U.P.I.
03:47The eyes of this matter are important.
03:49And also the culture of the country of the world, as we call work culture, which is work culture, has
03:55changed.
03:55The world's work culture has changed.
03:58The world's work culture has changed.
04:18Amid the political bickering, the RBI says the new framework is about making UPI financially
04:25sustainable, funding the infrastructure, technology and networks needed to keep digital payments
04:31expanding. But merchants are not convinced. The Retailers Association of India has warned
04:37that the new cost could push some small businesses back towards cash and is calling for government
04:43support instead of MDR on UPI. Several fintech and industry voices on the other hand have welcomed
04:50the move, arguing that a sustainable payment ecosystem needs a way to pay for the infrastructure
04:56powering it.
05:25UPI's ecosystem was very important to grow the ecosystem.
05:27UPI is welcome. We have to understand that we need more investment. We have to invest hundreds
05:33and thousands of crores to upgrade the system because we have come to a very large state.
05:37This is the largest payment system in the world, more than visa, more than visa, largest payment
05:42system in the world. And I think it's very good.
05:45So this is no longer simply a fight over 0.4 percent fee. It is a larger battle over who
05:52should pay for UPI. Merchants, the government, or the system itself.
05:58Bureau Report, India Today.
06:04Joining me on the show tonight, Upasana Ataku, Director of MobiQuick. Upasana, I appreciate
06:10your time here on India Today. The government has said that this MDR won't touch customers,
06:17only merchants, and small traders will also be protected. But eventually, the fear is that
06:25it would be passed on to the customers because if the merchants get impacted, then they will
06:32eventually, you know, pass it on.
06:36So firstly, thanks so much for having me on your show today. I think there's a lot of misinformation
06:43and fear propaganda spreading is what I'm seeing since last evening, and it's quite unfortunate.
06:48I think UPI has had such a transformational impact on India's economy, and specifically
06:53digital payments, and also for the benefit of consumers and merchants. Now, coming to the
07:00question at hand, I think that in everyday life, whether, you know, I'm taking a cab to
07:05work, or whether I'm, you know, buying basic groceries at a small store near my house, all
07:10of these transactions are typically less than 1000 rupees. And all of these transactions
07:17continue to be free. If I think about essential services like, you know, fuel for my car, or
07:23gas for our house, or bill payments, like I pay electricity bill, credit card bill, phone
07:30bill, etc. All of these have a flat price of 5 rupees. So I think from an everyday life
07:35perspective, you know, the merchant charging us, etc, that is being made out, I think you
07:41have to think of it very structurally. There are large merchants, and there are small merchants.
07:47When it comes to large merchants, you know, whether you're booking a flight or a hotel for
07:50travel, or whether you're buying branded clothes or shoes, you know, these are merchants who
07:56are already accepting credit card and debit card. And I'm happy to inform you that credit
08:00card, they are paying up to 1.8% on the transaction. Let's say you were to buy Bata
08:05shoes or Nike shoes. The merchant is paying that much for accepting a credit card. For accepting
08:12a debit card above 2000 rupees, the merchant is paying 0.9%. Now in contrast to that, the
08:19UPI transaction at 0.4% for these large merchants is going to be, you know, peanuts in contrast to
08:28the
08:28charges they are paying on other payment methods. When it comes to small merchants, you know, and we
08:33ourselves are doing so much acquiring as MubiQuick with regard to QR codes, sound boxes and EDC machines
08:40that we deploy. For most of the small and mid-tier merchants, if I look at, so for small merchants,
08:47there's
08:47already an exception. So if you're accepting payments less than 1 lakh rupees in a month, then regardless of
08:542000 rupees, no transaction will be charged. Now let's say there is a merchant who is, you know,
08:59doing a monthly sale of 5 lakh, 10 lakh, that merchant is already accepting card transactions.
09:06And for that merchant, if I look at the UPI transactions and what is the percentage of transactions that
09:13will be more than 2000 rupees, that number is going to be broadly 5 to 10% of their overall
09:19collections.
09:20So if you think about it, if I am a merchant who is doing 10, 20,000 of sale every
09:25day, and out of that, my
09:28UPI number is a certain number, and out of that UPI number, 10% of transactions are about 2000. So
09:34the actual
09:34impact to this merchant is not going to be as meaningful, you know, as the various, you know, media
09:41outlets or social media platforms are informing the merchant about. I think that this is too much ado that
09:49people are making, it's not going to be a monumental change in their lives. And I do not believe it
09:56is going
09:56to disrupt or change anything. And I do believe that this charge is important for the further scale up of
10:02UPI in India.
10:05So, Upasana, you are saying that this is largely much ado about nothing. But let's look at what
10:10opposition is saying. The government says that this is to make UPI sustainable. The opposition's
10:17view is, and I am going to get into what the opposition's exact criticism is, they are saying
10:22that the UPI costs for running it is approximately 20,000 crore a year to run, which is, which they
10:30say is less than a tenth of what RBI has transferred to the government in recent years. So, according
10:38to you, what is the actual maths?
10:41The actual math is very simple. You know, Visa, MasterCard, NPCI, these are all switches
10:47or networks. For a Visa and MasterCard transaction, already there is commercial pricing in place.
10:53What the government had done a few years ago, I believe in 2018 or 19, is that they had forced
11:00that NPCI will not be charging on any NPCI transactions. Now, what the, you know, political outlets that are
11:09talking about this are missing, is that, you know, substantial number of Indians have now
11:14started using digital payments. The cost of processing every transaction, Maria, is anywhere
11:19from 15 to 20 paisa. And all of the payment companies and banks are processing millions
11:26of transactions. So, there is an actual cost to it and this cost that I am mentioning, 18
11:31to 20 paisa, is just the cost of hosting it with whichever server company, you know, whether
11:36it is the cloud companies or the on-prem companies people use. Additionally, there is cost of the
11:43engineering team, cybersecurity, fraud prevention, product innovation. And for all of this cost
11:50that we have been expending, even the UPI subsidy that we were all getting was only covering
11:5510% of the cost. I think that it is a misnomer to say that, you know, banks are profitable,
12:02why should they get? The payments arms of all banks today are bleeding. All payment companies
12:09today are bleeding. And while we have come to this stage,
12:18as well as merchants, small business owners have access to credit products. Prior to digital
12:25payments, when most of the economy was running on cash, the accessibility of financial services
12:30was also very poor. So, this is a very important sort of step up from a financial inclusion perspective.
12:36If a merchant is accepting digital payments, let's say they think that cash is no charge,
12:41even if they are getting charged on 10% of their transactions, the fact that their transactions
12:46are digitized gives them access to working capital loans, which they were not previously
12:50getting from the formal, you know, banking sector. That is also an important empowering
12:56thing for them to keep in mind. Similarly, many consumers who were not previously using
13:01digital payments, they were also not coming under the overall, you know, financial inclusion
13:06charter and getting access to products. Digital payments and UPI have made a huge dent,
13:13positive dent in the last 10 years. I believe that the next 10 years growth cannot come from
13:19zero revenue. Today, if you look at the UPI market share, it is with two large American companies only.
13:26And why is that? Because most Indian companies don't have the deep pockets to the extent Google
13:30and Walmart has to fund the losses from such a large payment method. Now, if there is revenue,
13:35it will be a level playing field. And various Indian companies will be able to compete, you know,
13:42for the market share. And this is what we need for an Aakman Irbar and a Vikasit Bharat,
13:47if I think about it, from the long term sustainability of fintech companies and digital payments for the country.
13:58So, let's look at another charge coming in from the critics and also the opposition that this has been
14:04done to benefit American card companies, Visa and MasterCard. These companies which had lost ground to UPI
14:13and the spread and the sheer success of UPI, which we have seen in recent years. And I'll combine that
14:21with
14:21another point that has been made by, you know, a former Bharat Pay MD, Ashneer Grover, who has called
14:29this entire move regressive. So, if you could respond to that.
14:36Look, I'm not going to counter and say something about a person, you know, who has lost respect in the
14:42eyes of the entire fintech community for the actions that he has taken. I think that it's absolutely
14:48nonsensical the mass that he is trying to present. It has no head and tail. I don't believe if this
14:54is a benefit
14:55for Visa and MasterCard, then I wanted to say then, how is it benefiting that today 85% of the
15:01market share
15:01of UPI is also with two American companies. We do want that to change, right? We do want more Indian
15:06companies to participate in digital payments. We don't want to be that our Indian switch for the sake of
15:13financial inclusion. You know, we have kept it free. But that also means that only companies with deep
15:19pockets are able to participate in it. I don't think that this benefits anybody else except India as a
15:26country, as a sovereign country, as a citizen of India. I believe that we should all adopt it. I don't.
15:32I think all this fear-mongering is only going to create disruption or friction for the first, you know,
15:40one, one and a half months. Because it's absolutely crazy to think that, you know, people are going to go
15:47more regressively back to cash. I don't think that is going to happen. The merchants who are currently
15:52fearing this, when they actually see that on a daily basis, either they are not getting charged anything,
15:58or five out of their transactions are getting charged, they automatically...
16:09Certain elements in the society, you know, are doing various, I guess, paid propaganda to suit their own
16:17needs. From a FinTech perspective, from a Payments Council of India perspective,
16:22I'm also the Vice President at the, you know, Indian FinTech Federation, I want to tell you that
16:28all payment companies had signed a request letter, which we were sending again and again to the Ministry of
16:34Finance, literally begging and requesting that some form of MDR has to come. We are unable to support,
16:41you know, you know, the growth or the infrastructure costs that it is required just to support the
16:46current scale of UPI payments.
16:50You know, you've made an important point here that FinTech companies wanted this MDR. Is that what you're
16:57saying? And what was the nature of deliberations like with the government then, Upasana?
17:03Yeah, so see, we are part of various industry bodies, you know, including Payments Council of India and
17:09Indian FinTech Forum that I just mentioned. And we've been making various representations to the DFS.
17:16In fact, I can remember for the last several years, every time, you know, the industry was called to
17:22meet with the RBI leadership, the NPCI leadership, or the FM herself, you know, we have all been asking for
17:29the
17:29same thing. So while we may all be competing for the market share, but when it comes to this request,
17:34whether it is MobiQuick, whether it is PhonePay, whether it is PTM or anyone else, we have all been
17:40requesting for the UPI MDR because we believe that it is commercially impossible to further the scale up of
17:47digital payments in India without any financial backing. The unit economics are very important for the
17:53long term sustainability of the entire sector. I can tell you from a personal vantage point also, that last year,
18:04this year, you know, our payments, GMV has grown 50% year over year, but our revenue from payments has
18:10been flat.
18:10Why is it flat? Because of the same reason, because UPI is growing so fast. We are processing these transactions,
18:16eating up the cost, but we are getting zero revenue for that. And I want to say that not just
18:22us,
18:22almost all payment companies are bleeding. And that is why people keep joking in the capital markets that
18:28payment companies are not able to make money. Well, we are not...
18:34by keeping all UPI transactions free. And this will be a sigh of relief for all of us, that finally,
18:42after
18:44some amount of revenue that we are going to make. I also think while we are all doing the maths,
18:49we don't believe that this is still going to cover the entire cost. Because remember, most of the transactions
18:54are P2P, or most of the P2M, person to merchant transactions are less than 2,000 rupees. And a large
19:00number of transactions
19:01are actually essential payments, like, you know, fuel, bill payments, where again, it's a flat charge.
19:08So this is still not going to make us all whole. But at the least, it is going to, you
19:12know, reduce our losses
19:14to some extent, and it's going to pave the way for further development of financial services in India.
19:23All right, Upasana, really appreciate your time. Thank you for joining us and clearing lots of doubts.
19:29As you said that perhaps this is fear-mongering which is happening, and a lot of clarity had to emerge.
19:35So thank you for clarifying it.
19:41And in more news, and this is a story which is of interest to just about everyone.
19:47Now, Maharashtra's FDA commissioner has flagged something very important.
19:51That what hospitals pay for what they buy to what they make patients pay for consuming it,
20:04there is a huge difference.
20:05In fact, bills run into thousands of percentage that the hospitals tend to benefit from that.
20:11Why is this happening? And why are, be it largely the private hospitals, charging so much from patients?
20:20Let's look, take a look at this story.
20:26One admission, one emergency, one surgery.
20:33And suddenly, the savings you built over years can start disappearing, line by line on a hospital bill.
20:44Now, Maharashtra FDA commissioner, Tukara Munde, has put one part of that bill under the scanner.
20:49The price patients pay for hospital consumables.
20:55Munde has flagged what he calls a massive gap between the trade price of medical devices and the MRP patients
21:03can end up paying.
21:06His warning follows a Maharashtra government survey of surgical consumables used in patient care.
21:16An IV infusion set procured at 11.05 rupees carried an MRP of 325 rupees, a 2,854.5 percent
21:28markup.
21:29A syringe bought for 6.75 rupees carried an MRP of 57.20 rupees, a 747.4 percent markup.
21:40A catheter costing 29.41 rupees had an MRP of 310 rupees, a 954 percent markup.
21:49And nebulizers and oxygen masks bought at around 40 rupees to 45 rupees carried MRPs of 650 rupees to 715
21:59rupees.
22:02Munde says the larger problem is the information gap.
22:06Patients paying the bill often have no way of knowing what a medical consumable actually costs before it reached the
22:13hospital.
22:13That's why he has written to the Department of Pharmaceuticals and the National Pharmaceutical Pricing Authority or NPPA.
22:22His recommendations include capping trade margins, bringing essential medical devices under structured price monitoring,
22:31setting guidelines for the permissible gap between procurement prices and MRPs,
22:36rationalizing margins across the supply chain and an inter-agency review.
22:42The NPPA is now examining whether manufacturers and intermediaries are adding substantial margins before these products reach patients.
22:53But how expensive is healthcare in India, even beyond medical devices?
22:59The latest national sample survey for January to December 2025 puts average out-of-pocket expenditure for a hospitalization at
23:08about 34,064 rupees.
23:11For outpatient care, the average is around 861 rupees per treatment episode.
23:17And the public-private gap is even sharper.
23:21Average hospitalization expenditure is Rs. 6,631 rupees in a government hospital, while it is Rs. 50,508 rupees in
23:32a private hospital.
23:33That's roughly an eight-fold difference.
23:36For childbirth, the gap is even wider.
23:40Childbirth at government hospital is Rs. 2,299 rupees and in private hospital, it is Rs. 37,630 rupees, nearly
23:4916 times more.
23:52For millions, it's a choice between waiting in an outstretched public system or paying for more private care.
23:59And once inside, every line on the bill matters.
24:04Moonday has now put the medical device price gap under scrutiny.
24:09The question is whether that can mean greater transparency, tighter regulation and bills patients can actually understand and afford.
24:18Bureau Report, India Today.
24:25After bringing Tamil Nadu Chief Minister Joseph Vijay, then we went to Karnataka and got you an exclusive with Chief
24:35Minister of Karnataka, D.K. Shivkumar.
24:37Now, we are shifting the spotlight to Kerala, where VD Satisan will be at India Today's roundtable here in Thiruvananthpuram.
24:50He will be speaking about his vision for the state, what he has achieved in the last 120 days and
24:56what's the roadmap like.
24:59The roundtable begins at 10 a.m. tomorrow morning.
25:02I'm leaving you with this.
25:03Thanks so much for watching.
25:19When it comes to putting South India's political voices centre stage, India Today has consistently been ahead of the curve.
25:30Tamil Nadu saw a new political entrant rise to power this year.
25:34After taking charge as Chief Minister, Vijay chose India Today for his first national television appearance.
25:44Then came the India Today Karnataka Conclave.
25:47After taking charge as the Chief Minister, D.K. Shivkumar picked the India Today as the platform to share his
25:54vision for Karnataka.
25:57What do you mean by a harried man?
26:00Last time when you saw me with a lot of patience.
26:03Man in a hurry?
26:04Man in a hurry.
26:05Okay.
26:06Man in a hurry.
26:07Man in a hurry.
26:07Because people of Karnataka and my killers in the country, they are too much having confidence
26:21on me, dependent, and I have to give a good governance.
26:29And now, the spotlight moves further south to Kerala.
26:37On Thursday, the India Today Kerala Roundtable will bring Chief Minister B.D. Satishan to the centre of the conversation.
26:45Because the South has a lot to say.
26:49And India Today is bringing those voices to the nation.
26:54Bureau Report, India Today.
26:55...
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