BharatPe backs UPI MDR framework, distances itself from Ashneer Grover's remarks

Fintech firm BharatPe on Thursday strongly backed the newly introduced Merchant Discount Rate (MDR) framework for UPI merchant payments, while distancing itself from criticism of the move by its former co-founder and chief executive Ashneer Grover. The company said Grover had no association with BharatPe since 2024 and his comments on the new framework were made entirely in his individual capacity. BharatPe CEO Nalin Negi said the changes would strengthen the economics of digital payments while continuing to protect consumers as well as micro and small merchants. The clarification came after Grover criticised the introduction of MDR on certain UPI merchant payments and described the move as regressive.

BharatPe backs framework

Negi said the new framework demonstrated that UPI would remain free for consumers while helping create a sustainable and stronger payments ecosystem. Consumers would continue to face no charges for UPI payments, while micro and small merchants covered under the person-to-merchant framework would remain protected by zero MDR, the company said. BharatPe pointed out that around 96 per cent of P2M transactions would remain unaffected by the changes. “The framework creates resources to expand merchant acceptance, infrastructure and digital payment adoption, particularly across smaller towns and underserved markets,” Negi said. BharatPe also welcomed the provision for a dedicated fund to support merchant onboarding, digital-payment infrastructure and UPI adoption among small merchants, particularly in Tier-3 to Tier-6 centres and other underserved markets.

Under the revised framework, person-to-person UPI transfers will continue to remain free irrespective of the amount involved. Merchant payments of up to Rs 2,000 and transactions covered by the zero-MDR regime for small merchants will also remain free. MDR will apply only to specified merchant transactions above Rs 2,000. The framework introduces a 0.4 per cent MDR on eligible merchant payments above that threshold from October 15, while certain categories, including railways, fuel, telecom and insurance, will attract a flat Rs 5 charge. The government has clarified that the MDR cannot be passed on to consumers and is not a tax or charge collected by the government or the National Payments Corporation of India. Instead, the proceeds will be distributed among participants in the payments ecosystem, including banks and payment service providers, to support infrastructure, cybersecurity, innovation and expansion.

Distances from Grover

BharatPe separately made it clear that Grover’s criticism should not be interpreted as reflecting the fintech company’s position. “Mr Grover has had no association with BharatPe since 2024 and is neither a shareholder nor associated with the company in any capacity,” a BharatPe spokesperson said. The company urged the media not to attribute any statement or view expressed by Grover to BharatPe, saying its position on the MDR framework and digital-payments ecosystem was represented by its current leadership and authorised spokespersons.

Grover had criticised the prospect of imposing MDR on UPI transactions, arguing that charges could undermine one of India’s most successful digital-payment systems and potentially encourage greater use of cash. His position stands in sharp contrast to BharatPe’s current management, which believes some revenue from higher-value merchant payments is necessary to sustain investment in the rapidly expanding UPI infrastructure. BharatPe thanked the NPCI, Reserve Bank of India and the government for the new framework, saying it would support both merchants and consumers while helping build a financially sustainable payments ecosystem.