Archive · 18 Sep 2026
Government, Congress Clash Over Panel Support For New UPI Fee
The government wants some merchants to pay a small fee when customers use UPI to pay them.
The fee is planned for certain merchant payments above Rs 2,000 and is scheduled to start on October 15, 2026.
People sending money to other people would not pay this fee.
The government says a parliamentary committee supported creating a tiered way to fund UPI.
Five Congress MPs were present when the committee adopted a related report, and the published minutes did not show their disagreement.
However, Congress MPs Gaurav Gogoi and Manish Tewari say the committee never saw the exact fee plan later announced.
They say members had questioned whether MDR was needed and would work.
The committee said UPI needs more money for cybersecurity, fraud prevention and network infrastructure.
Congress has opposed the fee, while the government says it is not a consumer tax and was not imposed because of foreign pressure.
Five Congress MPs attended the Finance Committee meeting on August 12 when a report recommending a tiered UPI revenue model was adopted, with no dissent recorded in published minutes.
The MPs were P Chidambaram, Manish Tewari, Gaurav Gogoi, Kishori Lal and K Gopinath.
Gogoi and Tewari say the committee was not shown the specific proposal, including its rate, ceiling or exemptions, and that members questioned the need for MDR.
The announced framework would impose a 0.4% MDR on specified merchant UPI transactions above Rs 2,000 from October 15, 2026; person-to-person payments and smaller transactions would remain free.
The committee cited Rs 2,000 crore in government support against estimated annual industry costs of Rs 20,700 crore, while the government rejected claims of foreign influence.
- Who
- The Government of India, the Parliamentary Standing Committee on Finance, Rahul Gandhi, and Congress MPs including P Chidambaram, Manish Tewari and Gaurav Gogoi are central to the dispute.
- What
- The government is introducing a 0.4% MDR on specified merchant UPI transactions above Rs 2,000, while Congress disputes the government’s claim that its MPs supported the specific measure.
- When
- The committee adopted the relevant report on August 12; the announced MDR framework is scheduled to begin on October 15, 2026.
- Where
- The dispute concerns India’s Unified Payments Interface and proceedings of the Parliamentary Standing Committee on Finance.
- Why
- The committee cited a funding gap between government support and the estimated costs of operating and expanding the UPI ecosystem.
Congress Opposition
Government and Committee Rationale
What the committee supported
Congress Opposition
Gaurav Gogoi and Manish Tewari say no specific proposal for the October 15 MDR—including its rate, amount, ceiling and exemptions—was presented to the committee. They say members raised concerns about the need and effectiveness of MDR.
Government and Committee Rationale
The government says the committee recommended a self-reliant, tiered MDR or revenue model, approved its report on August 12, and recorded no dissent from the five Congress MPs present.
Whether the fee should proceed
Congress Opposition
Rahul Gandhi and other Congress leaders have demanded that the decision be withdrawn, calling it a betrayal of ordinary citizens and alleging it could benefit major American payment companies.
Government and Committee Rationale
The government says the MDR is paid within the payment ecosystem rather than charged to consumers and is needed to make UPI financially sustainable.
Foreign influence
Congress Opposition
Congress alleges that the Centre changed the zero-MDR framework under pressure from the United States and to benefit American card networks.
Government and Committee Rationale
The Finance Ministry rejects the allegation, saying India’s UPI policy decisions are made independently to build a self-sustaining, inclusive and affordable digital-payments ecosystem.
- Proposed MDR
- A 0.4% Merchant Discount Rate would apply to specified merchant UPI transactions above Rs 2,000.
- Effective date
- The framework is scheduled to take effect on October 15, 2026.
- Who pays
- The charge would be borne within the payment ecosystem by merchants rather than directly by consumers.
- Free transactions
- Person-to-person UPI transfers and merchant transactions up to Rs 2,000 would remain free.
- Reported cap
- One report said the charge would be capped at Rs 300 for transactions of Rs 75,000 or more.
- Congress MPs present
- P Chidambaram, Manish Tewari, Gaurav Gogoi, Kishori Lal and K Gopinath were present when the report was adopted on August 12.
- Funding gap
- The committee cited Rs 2,000 crore in government support for 2026-27 against estimated annual industry costs of Rs 20,700 crore.
Sources
5 Congress MPs, Including P Chidambaram, Were On Panel That Backed UPI Fee, But Did Not Dissent
Congress MPs were on Panel that Backed MDR on UPI: Govt
UPI MDR row: Congress says finance panel did not discuss new fee proposal - Telegraph India
Congress MPs Backed Tiered UPI Revenue Model In Parliamentary Panel Meeting, Says Govt
