Rahul Gandhi urges Modi to roll back charges on UPI transactions
New Delhi: Opposition Leader Rahul Gandhi on Wednesday demanded the rollback of charges on certain Unified Payments Interface (UPI) transactions, urging Prime Minister Narendra Modi to “have a spine” and “stop lying down in front of the United States”.
Gandhi alleged that the Prime Minister had “taxed” every Indian to give a “huge amount of money” to the US.
The Union government has introduced a 0.4 per cent Merchant Discount Rate (MDR) on specified UPI person-to-merchant transactions above Rs 2,000 from October 15. The fee will be capped at Rs 300 per transaction for payments of Rs 75,000 and above. The government has clarified that MDR is not a tax and will not be charged to customers.
MDR is a fee within the merchant payment ecosystem and is distributed among participating banks, payment service providers and UPI application providers.
Earlier on Wednesday, Congress leader Supriya Shrinate alleged that Indians were being forced to pay UPI charges because the government was “surrendering to American pressure” and wanted to help US companies increase their valuations.
“People in India who are already struggling with inflation and unemployment are now being forced to boost the valuation of an American company before they sell shares to the public,” Shrinate alleged.
She said Walmart-owned PhonePe and Google Pay together account for more than 86 per cent of the UPI payments market in India and claimed the charges would help them increase their valuations.
Congress MP Jairam Ramesh questioned whether the move was intended to allow US card companies to compete with UPI payments in the Indian market.
“The PM has redefined NOTA – Narendra’s Ongoing Trump Appeasement,” Ramesh said.
Congress president Mallikarjun Kharge said the government’s “surrender” by introducing the charges was an example of its “meekness”.
Other Opposition parties also criticised the new UPI charges.
The Aam Aadmi Party described the charges as part of the BJP-led National Democratic Alliance government’s “new loot policy” and alleged that they reflected “Trump’s pressure on PM Modi’s decisions and his direct influence over India’s internal matters”.
Nationalist Congress Party (Sharadchandra Pawar) leader Anish Gawande alleged that the government had taken the decision because it had “run out of money”.
“Income Tax rebates are delayed,” he said. “Taxes are charged on UPI in the name of convenience fees. We are the World Bank’s biggest borrower.”
On Wednesday, the Union Finance Ministry rejected claims that the charges had been introduced because of “foreign influence”.
“India’s UPI policy decisions are made independently, with the clear goal of building a self-sustaining, inclusive, and affordable digital payments ecosystem,” the ministry said in a social media post.
The government has also clarified that the new framework will have no impact on person-to-person UPI transactions, irrespective of the amount transferred. Payments to merchants up to Rs 2,000 will also remain free, while banks have been advised to ensure that MDR is not passed on to customers.
The government said approximately 96 per cent of all person-to-merchant UPI transactions will remain unaffected.
For transactions above Rs 2,000 in essential and thin-margin sectors such as railways, telecommunications, insurance, fuel and agricultural inputs, a flat MDR of Rs 5 per transaction will apply. Capital market transactions will attract an MDR of 0.02 per cent, capped at Rs 300.
In 2025-26, transactions exceeding Rs 2,000 accounted for around 4 per cent of person-to-merchant UPI payments by volume but nearly two-thirds of their total value.