NEW DELHI, SEP 15 (PTI): The Congress on Tuesday raised questions over the government’s notification on UPI transactions, claiming that stage is clearly being set for people to pay a fee for such transactions and asking whether this is being done to open digital payments for American firms to “appease” US President Donald Trump.
The opposition party alleged that the government has yet again shown 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 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 2000. 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 10 A 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.
The amendment Bill was passed by Parliament during the Monsoon Session, which concluded on August 13, 2026. Following the passage of the Bill, the government had said the UPI and Services Steering Committee, headed by the National Payments Corporation of India (NPCI), would decide on the MDR rates.
Explaining the rationale for imposing charges, the government, in a statement, said, with exponential transaction volumes, the system requires significant and continuous upgrades in cybersecurity, fraud prevention, and infrastructure.
Charges were required for market expansion and self sustainability, it had said. It is necessary to increase competition by encouraging more companies to expand their operations, which requires a self-sustaining revenue model, it had said.
Reliance on subsidies alone is not viable for the next wave of growth, it had said, adding that a balanced framework is required to ensure that UPI remains robust, inclusive, and future-ready.
UPI is operated by the National Payments Corporation of India (NPCI), an initiative of the Reserve Bank of India (RBI) and the Indian Banks’ Association.
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 is 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.
The cost will inevitably be borne by ordinary people who will now have to pay to use UPI transactions, he had said.
Finance Minister Nirmala Sitharaman had said the Merchant Discount Rate on digital transactions applies to merchants and not to customers, and the MDR charge would support banks and fintech companies to invest more on infrastructure and security.
Hitting out at Ramesh over his remark that ordinary people may have to pay more for using UPI, Sitharaman had said the UPI and Services Steering Committee headed by NPCI is yet to decide on the MDR, which would happen only after Parliament passes the Taxation and Other Laws (Amendment) Bill, 2026.
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 & Fintech to invest more on infrastructure, innovation & security. All users of UPI will reap the benefits of this investment.”
Congress spreading ‘fake news’ on UPI charges: BJP
The BJP on Tuesday accused the Congress of spreading “fake news” about UPI transaction charges, saying the government has made it absolutely clear that merchant discount rate (MDR) charges will not be levied on consumers. This came after the Congress attacked the Centre over its notification on UPI transactions, with Leader of Opposition in Lok Sabha 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” t pressure from the US. BJP spokesperson Pradeep Bhandari hit back at the Congress, calling the opposition party a “jhooth ki dukaan (shop of lies)”.
“Congress is once again spreading fake news. 96 per cent of UPI merchant (P2M) transactions are Rs 2,000 or below, and they are 100 per cent charge-free. RuPay debit-card payments remain charge-free. Consumers pay zero transaction charge. P2P UPI transactions remain completely free,” he said in a post on X.
“The Government has made it absolutely clear: MDR charges will NOT be levied on consumers,” the BJP leader added.
In a gazette notification, the government has 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 apply 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.
According to sources, a panel comprising representatives of banks, service providers and various associations would soon take a call on charges to be levied on UPI payments above Rs 2,000 to merchants. The UPI & Services Steering Committee has 22 members, including Indian Banks’ Association (IBA) and Payments Council of India (PCI).
The principal opposition Congress raised questions over the government’s notification on UPI transactions, claiming the stage is clearly being set for people to pay a fee for such transactions.
Congress president Mallikarjun Kharge said the Modi government’s “loot” has now reached UPI.
“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 10000 could be made,” Kharge said in a post in Hindi on X, and asked whether it was true.
Terming the Congress’ claims as “completely false”, BJP leader Amit Malviya said there is no government order stipulating that Rs 25 will be levied on a Rs 5,000 payment or Rs 50 on a Rs 10,000 payment.
“The notification dated September 14 merely clarified the ‘zero-charge protection’ for UPI and RuPay transactions up to Rs 2,000. No 0.5 per cent charge has been fixed for UPI payments exceeding Rs 2,000,” he said in a post on X.
“Most importantly, no charges are being levied on UPI users. Person-to-person UPI transactions remain free, regardless of the amount. The government has clarified that even if an MDR is introduced in the future, it will apply to specific merchant transactions, not to the consumer,” he added.
Malviya alleged that figures of Rs 25 and Rs 50 cited by the Congress are “fabricated calculations based on a hypothetical 0.5 per cent rate”.
“In reality, the government itself is providing incentives to the payment ecosystem to keep UPI free. Between FY22 and FY24, the government provided incentives amounting to Rs 1,389 crore, Rs 2,210 crore, and Rs 3,631 crore, respectively. Incentive support of Rs 2,196.21 crore was provided for 2025-26 and Rs 2,000 crore has been budgeted for FY27,” he said.