Bhubaneswar: Odisha Leader of the Opposition (LoP) and Biju Janata Dal (BJD) President Naveen Patnaik on Friday raised concerns over the recently announced 0.4 per cent Merchant Discount Rate (MDR) on certain Unified Payments Interface (UPI) transactions above Rs 2,000, stating that the interests of the common man and small traders such as shopkeepers must be protected.

Patnaik made the remarks while responding to media queries on the controversy surrounding charges on UPI transactions upon his arrival at the Biju Patnaik International Airport in Bhubaneswar.

Earlier, the Odisha Congress had strongly criticised the Union government over the issue, comparing the 0.4 per cent MDR on UPI transactions with the historic ‘Jizya tax’. On Thursday, senior Congress leader Sonali Sahoo alleged at a press conference that the central government had been resorting to various tactics to extract money from poor workers, labourers and the working class for the past 12 years.

She argued that taxing UPI transactions above Rs 2,000 added insult to injury for a public already struggling under rising inflation. Sahoo claimed that since the UPI system was creating obstacles to the interests of American companies such as Google Pay, Paytm, Amazon, Visa Card and ATM services, these companies raised the issue with the United States Trade Representative (USTR). She alleged that pressure was exerted on the Indian government to scrap the free UPI transaction system and impose charges on transactions above $25.

Notably, the National Payments Corporation of India (NPCI) recently announced a 0.4 per cent charge. In an attempt to clear confusion, the Finance Ministry issued an explainer on Tuesday, clarifying that the new UPI framework has no impact on person-to-person transactions, which will continue to remain completely free irrespective of the amount transferred.

Payments to merchants up to Rs 2,000, along with transactions covered under the zero-MDR framework for small merchants, will also remain free. Consequently, approximately 96 per cent of all person-to-merchant transactions will remain unaffected. MDR will apply only to specified merchant transactions above Rs 2,000.