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Government cites Congress panel support for UPI merchant fee
The government wants to introduce a small fee for some UPI payments made to shops.
The fee would apply to specified merchant payments above Rs 2,000.
It is planned to begin on October 15, while person-to-person UPI payments would remain free.
The government says the fee would be charged to merchants, not customers.
It also says a parliamentary committee recommended different fee levels for different transactions.
Five Congress MPs were present when that committee approved its report, and no disagreement was recorded in the published minutes.
Rahul Gandhi disagrees and wants the decision cancelled.
The committee said government support does not cover enough of the cost of running and protecting the UPI system.
The government said five Congress MPs backed a tiered revenue framework for UPI merchant payments.
P Chidambaram, Manish Tewari, Gaurav Gogoi, Kishori Lal and K Gopinath attended the August 12 report adoption.
No dissent from the Congress MPs was recorded in the published committee minutes.
The announced framework would charge a 0.4% MDR on specified merchant UPI transactions above Rs 2,000 from October 15.
Rahul Gandhi demanded a rollback, while the committee cited a funding gap between Rs 2,000 crore in government support and Rs 20,700 crore in estimated costs.
- Who
- The Government of India, Rahul Gandhi, and the Parliamentary Standing Committee on Finance are central to the dispute; five Congress MPs were present during the committee’s report adoption.
- What
- The government is defending a planned 0.4% MDR on specified merchant UPI payments above Rs 2,000, while Rahul Gandhi is demanding its withdrawal.
- Where
- The issue concerns India’s Unified Payments Interface; the government’s statement was made in New Delhi.
- When
- The committee adopted its report on August 12; the framework is scheduled to take effect on October 15, and the government defended it on Wednesday.
- Why
- The committee said a tiered revenue model is needed to address UPI’s funding gap and support cybersecurity, fraud prevention and network infrastructure.
Opposition to the fee
Government and committee rationale
Whether the charge should proceed
Opposition to the fee
Rahul Gandhi opposed the merchant UPI fee and demanded that the government withdraw it.
Government and committee rationale
The government defended the charge as part of a tiered revenue framework intended to make the UPI ecosystem financially sustainable.
Congress MPs’ position
Opposition to the fee
Rahul Gandhi criticized the decision and alleged that Narendra Modi was acting to benefit Donald Trump and the United States.
Government and committee rationale
The government said five Congress MPs supported the committee’s recommendation because they attended the report’s adoption without recorded dissent.
Who bears the cost
Opposition to the fee
The opposition position presented in the articles is that the fee should be rolled back.
Government and committee rationale
The government said the MDR would be charged to merchants rather than consumers and rejected the allegation of foreign influence.
Key facts
- Proposed MDR
- A 0.4% Merchant Discount Rate would apply to specified UPI merchant payments above Rs 2,000.
- Effective date
- The framework is scheduled to begin on October 15.
- Customer charges
- The government said the fee would be charged to merchants, not consumers; person-to-person transactions would remain free.
- Congress MPs present
- P Chidambaram, Manish Tewari, Gaurav Gogoi, Kishori Lal and K Gopinath attended the August 12 meeting.
- Recorded dissent
- No dissent from the Congress MPs was recorded in the published minutes.
- Government allocation
- The committee cited a Rs 2,000-crore allocation for 2026-27 to offset costs linked to zero-MDR RuPay and low-value BHIM-UPI transactions.
- Estimated funding gap
- The committee cited estimated industry operational costs of Rs 20,700 crore and said current incentives cover 11% of actual costs and 14% of potential MDR collections.
Quotes
Parliamentary Standing Committee on Finance
Parliamentary committee whose report recommended a sustainable UPI revenue mechanism
“The Committee observe that while UPI is expected to process up to 150 billion transactions per month and add 600 million new users, the current government incentive covers merely 11 per cent of the industry's actual costs and 14 per cent of potential MDR collections, creating a structural funding gap impacting long-term infrastructural investment.”
deccanchronicle.com
“The Committee would like to emphasise that establishing a viable revenue mechanism is critical to ensuring that the UPI ecosystem achieves financial sustainability without perpetually straining the government exchequer”
news18.com
A senior government functionary
Government official cited in the article regarding the Congress MPs’ panel position
“Why is Rahul Gandhi opposing something his own MPs, including former finance minister P Chidambaram and former minister in the UPA government Manish Tewari, supported within the parliamentary panel”
news18.com
deccanchronicle.com
Sources
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