Archive · 18 Sep 2026
Congress Denies Backing Proposed UPI Merchant Fee
India is arguing about whether some larger UPI payments to shops should have a fee.
The reported fee is 0.4 per cent for certain payments above Rs 2,000.
It would apply to payments made to merchants, not ordinary transfers between two people.
Recurring payments such as utility bills and subscriptions would not automatically receive the fee just because they exceed Rs 2,000.
Congress MPs Gaurav Gogoi and Manish Tewari say the Finance Committee never saw the detailed fee proposal.
They say the committee discussed MDR generally and questioned whether it was necessary and effective.
The government says the committee supported exploring a tiered revenue system and that no dissent was recorded when its report was adopted.
Rahul Gandhi and other Congress leaders want the fee withdrawn, while the government says a new revenue model is needed to support digital-payment infrastructure.
Congress MPs Gaurav Gogoi and Manish Tewari say no specific UPI MDR proposal was presented to the Finance Committee.
The reported framework would impose a 0.4 per cent fee on certain person-to-merchant UPI transactions above Rs 2,000 from October 15, 2026.
The government says the committee supported exploring a tiered MDR or revenue model and noted that it should be implemented promptly.
Congress argues that discussing MDR in principle was not approval of a specific rate, fee, ceiling or exemption structure.
The committee report cited Rs 2,000 crore in government support against estimated digital-payment industry costs of Rs 20,700 crore.
- Who
- The Government of India, Congress MPs including Gaurav Gogoi and Manish Tewari, Rahul Gandhi, and the Parliamentary Standing Committee on Finance.
- What
- A dispute over a reported 0.4 per cent Merchant Discount Rate on certain UPI payments to merchants above Rs 2,000, and over whether Congress MPs supported it.
- When
- The political dispute was reported on Thursday and Friday; the committee report was adopted on August 12, and the reported fee is scheduled to begin on October 15, 2026.
- Where
- India, including Parliament and the national UPI digital-payments system.
- Why
- The government cites the need for a sustainable revenue model and a gap between public support and industry costs, while Congress opposes the fee and disputes claims that its MPs endorsed the specific proposal.
Congress and Fee Opponents
Government and Committee Rationale
Whether Congress endorsed the proposal
Congress and Fee Opponents
Gaurav Gogoi and Manish Tewari say the committee discussed MDR only in general terms and never received or approved the specific fee structure.
Government and Committee Rationale
The government says the committee backed a tiered MDR or revenue framework; five Congress MPs were present when the report was adopted, and published minutes recorded no dissent.
Meaning of the committee recommendation
Congress and Fee Opponents
Congress says the recommendation to “explore” a self-reliant, tiered revenue model did not amount to approval of a particular MDR.
Government and Committee Rationale
The government and committee-related accounts interpret the recommendation as support for developing and promptly implementing a tiered revenue framework.
Whether the fee is necessary
Congress and Fee Opponents
Congress says MDR could hurt small merchants, vendors and entrepreneurs, and questions its need and effectiveness.
Government and Committee Rationale
The committee report says existing incentives cover only a small share of industry costs, creating risks for cybersecurity, fraud prevention and network infrastructure.
Political justification
Congress and Fee Opponents
Rahul Gandhi and other Congress leaders demand withdrawal of the fee and allege it would benefit major US-based payment companies; these are political allegations disputed by the government.
Government and Committee Rationale
The government says a viable revenue model is needed to sustain digital payments and has questioned Rahul Gandhi’s opposition to a framework it says Congress-linked committee members supported.
- Reported MDR
- A 0.4 per cent charge would apply to certain person-to-merchant UPI transactions above Rs 2,000.
- Effective date
- The reported framework is scheduled to apply from October 15, 2026.
- Transactions outside scope
- Person-to-person transfers would not be covered, and recurring payments would not automatically attract the fee solely because they exceed Rs 2,000.
- Congress position
- Gaurav Gogoi and Manish Tewari say the committee was not shown the specific rate, fee amount, ceiling or exemption slabs.
- Government position
- A government functionary and committee-related accounts said the panel supported exploring a tiered MDR or revenue framework and urged prompt operationalisation.
- Committee attendance
- P. Chidambaram, Manish Tewari, Gaurav Gogoi, Kishori Lal and K. Gopinath were reported present when the report was adopted on August 12.
- Funding gap
- The committee report cited Rs 2,000 crore in 2026-27 support against estimated digital-payment industry operational costs of Rs 20,700 crore.
