Parties clash over UPI fee on merchant transactions above Rs 2,000
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New Delhi: The introduction of a merchant charge on selected UPI transactions above Rs 2,000 has triggered a political dispute, with the BJP defending the revised payment structure and the NCP (Sharadchandra Pawar) accusing the Centre of placing an additional burden on consumers.
Under the new framework announced by the National Payments Corporation of India (NPCI), a 0.4 per cent Merchant Discount Rate (MDR) will apply to eligible person-to-merchant UPI payments exceeding Rs 2,000 from October 15. The charge will be imposed on merchants, while consumers will not be directly charged for making the payment.
BJP MP Anurag Thakur said the change should be assessed in the context of the rapid expansion of India’s digital payments network. He noted that UPI had made cashless payments accessible to small traders, street vendors, tea sellers and ordinary consumers, gaining recognition internationally.
“India’s digital transactions are now cited as an example across the world,” Thakur said, adding that people from different sections of society could now make payments easily through digital platforms.
He accused the Congress of attempting to mislead the public and said the details of the new arrangement should be examined carefully before drawing conclusions.
Thakur also pointed out that payments up to Rs 2,000 would remain outside the charge. He claimed that 96 per cent of transactions above the threshold would also not attract a transaction fee under the revised system.
NCP (SP) national spokesperson Clyde Crasto, however, criticised the Centre and said the new charge could eventually affect customers even if it was formally imposed on merchants.
“The Bharatiya Janata Party government at the Centre has found yet another way to trouble people,” Crasto said, describing the move as a tax on UPI transactions.
He argued that shopkeepers could pass on the additional cost by increasing prices or adding it to customers’ bills.
“Which shopkeeper will pay it out of his own pocket? Why would he take that burden?” Crasto asked.
The controversy follows an NPCI circular issued on Tuesday outlining the revised charges for selected merchant payments. The framework does not apply to person-to-person transfers or small merchants covered under the designated person-to-person merchant category.
The MDR will be capped at Rs 300 for transactions of Rs 75,000 and above. A fixed charge of Rs 5 will apply to payments above Rs 2,000 in specified sectors, including railways, telecommunications, insurance, fuel and agricultural inputs.
The new system is aimed at large-value person-to-merchant payments, while everyday low-value UPI transactions will continue without a direct charge to users.
The change is significant because UPI is widely used for payments to retailers, vendors and service providers across the country.
(Inputs from IANS)