Congress attacks Centre over UPI notification, alleges fee route being opened

The Congress attacked the Modi government over a notification restricting UPI and RuPay charges on transactions up to Rs 2,000. Rahul Gandhi and Mallikarjun Kharge alleged the move could pave the way for Merchant Discount Rate charges on larger transactions

New Delhi: The Congress on Tuesday attacked the Modi government over its notification on UPI transactions, with Rahul Gandhi alleging that it has quietly paved the way for imposing fees on such transactions and that a “compromised” Prime Minister Narendra Modi was “once again surrendering” to American pressure.

The opposition party raised questions over the government’s notification on UPI transactions, claiming that the stage is clearly being set for people to pay a fee for such transactions.

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Congress president Mallikarjun Kharge said the Modi government’s “loot” has now reached UPI. “‘No fees on UPI’ has been changed to ‘no fees on UPI transactions up to Rs 2,000’. Sky-high inflation has already emptied the common person’s pocket. Wholesale inflation is near 10%, and the BJP government has planned to impose a ‘Digital Payments Tax’ on the public, aiming to destroy whatever little savings they have left,” Kharge said in a post in Hindi on X.

“Behold the Modi government’s biggest flip-flop — ten years ago, demonetisation delivered a shock to the country’s economy. When questions were raised about the disastrous outcomes of demonetisation, the government argued that it was imposed to promote digital payments and a cashless economy,” he said.

The Finance Minister had recently stated in Parliament that no tax or charges would be levied on UPI, but according to several reports, a potential collection of Rs 25 on a Rs 5,000 transaction and up to Rs 50 on Rs 10,000 could be made, Kharge said, and asked whether it was true.

Speaking of MDR, doesn’t the government know that this additional burden on merchants will ultimately be recovered from the common consumer’s pocket through price hikes, Kharge asked.

“Instead of providing relief to the inflation-weary public, the Modi government is searching for a new way every day to rob their pockets!” the Congress chief said.

In a post in Hindi on X, Gandhi alleged that the Modi government has quietly paved the way for imposing fees on UPI.

“Now, MDR can be levied on merchant UPI transactions above Rs 2,000. Even if these transactions account for just 5% of the volume, they make up nearly 65% of UPI’s total transaction value,” Gandhi said.

“The government says no fees will be charged to customers. But where will the fees imposed on shopkeepers ultimately come from? Added to the prices, straight out of the customer’s pocket,” the Leader of Opposition in the Lok Sabha said.

American payment companies have long opposed India’s zero-MDR policy, Gandhi said. Now, the Modi government has opened the path to changing the policy in exactly that direction, Gandhi claimed.

“Just like with the US trade deal, compromised PM Modi is once again surrendering to American pressure,” the former Congress chief alleged.

The Congress alleged that the government has yet again shown a complete lack of honesty and transparency and has broken the trust of users.

The opposition party’s attack came after the government directed banks and payment system providers not to levy charges on Unified Payments Interface (UPI) transactions of up to Rs 2,000 or on payments made through RuPay debit cards.

However, the government has not specified whether charges would be applicable to transactions above Rs 2,000, to be paid by merchants. So far, there has been no charge on UPI transactions, irrespective of the amount.

Reacting to it, Congress general secretary in-charge of communications Jairam Ramesh said, “Just as we warned on August 6, 2026, to which the Hon’ble FM herself had deemed it fit to respond, the Modi government is now using new laws bulldozed through Parliament to start the process of charging for UPI.”

“A notification has just been issued under the amended Payment and Settlement Systems Act, 2007, that prohibits banks and providers from charging only for UPI transactions under Rs 2,000. But there is NO explicit protection for any transaction above this cap,” Ramesh said on X.

The stage is clearly being set for all of us to pay a fee for UPI transactions, he claimed.

“Tomorrow the cap itself might be changed with another such notification — there is no longer a guarantee in the law. For all we know, the government can introduce a charge for daily person-to-person transactions as well,” Ramesh said.

“The Modi government has yet again shown complete lack of honesty and transparency and has broken the trust of users. Is all of this being done to open digital payments for American companies to appease President Trump?” the Congress general secretary said.

As per a gazette notification dated September 14, no bank or system provider would impose, whether directly or indirectly, any charge on a person making or receiving a payment through RuPay debit card or UPI transaction of up to Rs 2,000.

The notification follows an amendment to Section 10A of the Payment and Settlement Systems Act, 2007, which provides an enabling framework for imposing a Merchant Discount Rate (MDR) on payments through UPI and other notified electronic payment modes.

Last month, the Congress had attacked the government over the Taxation and Other Laws (Amendment) Bill before it was passed, asking whether Prime Minister Narendra Modi was seeking to dilute UPI and open the digital payments sector to American businesses “under pressure” from his “good friend Donald Trump”.

Ramesh had said the Modi government’s latest Bill removes the statutory guarantee that keeps UPI transactions free. It opens the door to Merchant Discount Rate (MDR) charges, which can easily be expanded to all payments in the future, Ramesh had said.

Replying to Ramesh, Sitharaman had said, “Before spreading a canard, @Jairam_Ramesh ji, please consider this: Merchant Discount Rate (MDR) applies only on the merchants and not on the end users/customers. It will support the banks and fintech to invest more on infrastructure, innovation & security. All users of UPI will reap the benefits of this investment.”