Archive · 16 Sep 2026
Congress MPs Backed UPI MDR Push Before Party Opposition
A government panel studied whether some businesses should pay a small fee when customers use UPI.
Five Congress members attended the meeting where the panel supported creating such a system, and no disagreement from them was recorded.
The government has now introduced a 0.4% fee on some business payments above Rs 2,000.
Merchants, not customers, are supposed to pay it.
The fee is limited to Rs 300 for very large transactions.
Small payments, person-to-person transfers and several listed services are excluded or treated differently.
Rahul Gandhi and the Congress now oppose the fee and want it withdrawn.
The government and the payments industry say a revenue system is needed to pay for UPI’s technology, security and continued operation.
Five Congress MPs reportedly did not dissent when a parliamentary panel backed a tiered MDR framework for UPI transactions in August.
The panel said a revenue model was needed to make the UPI ecosystem financially sustainable and support cybersecurity, fraud prevention and infrastructure.
The government has notified a 0.4% MDR on person-to-merchant UPI payments above Rs 2,000 from October 15, payable by merchants and capped at Rs 300.
Rahul Gandhi opposed the measure, calling it a tax and alleging that it would benefit the United States; the finance ministry rejected the allegation.
The National Payments Corporation of India said industry costs approach Rs 20,000 crore annually, while the panel cited an estimated requirement of Rs 20,700 crore against Rs 2,000 crore budgeted.
- Who
- The government, the National Payments Corporation of India, Rahul Gandhi and Congress; five Congress MPs were members of the Parliamentary Standing Committee on Finance.
- What
- A 0.4% merchant discount rate has been notified for certain person-to-merchant UPI payments above Rs 2,000, following a parliamentary panel’s earlier support for a tiered MDR framework.
- When
- The panel adopted its report in August, it was tabled on August 12, and the notified MDR is scheduled to take effect on October 15.
- Where
- The policy applies to qualifying UPI transactions in India; the parliamentary committee met in the context of Parliament’s consideration of the measure.
- Why
- The government and NPCI say the framework is intended to make UPI financially sustainable and fund operating, security and infrastructure costs.
Congress Opposition
Government and Payment Industry
Whether the MDR should remain
Congress Opposition
Rahul Gandhi and the Congress oppose the notified fee and have called for its rollback.
Government and Payment Industry
The government has ruled out a rollback and says the framework will support a self-sustaining UPI ecosystem.
Whether the fee is a tax
Congress Opposition
Rahul Gandhi described the measure as a tax on Indians and alleged that it would divert money to the United States.
Government and Payment Industry
The finance ministry rejected the allegation and said MDR is neither a government tax nor a charge collected by the government or the National Payments Corporation of India.
Need for a revenue model
Congress Opposition
The Congress’s current opposition focuses on the impact and funding destination of the new charge.
Government and Payment Industry
The finance committee and NPCI said a tiered commercial model is needed because government support is insufficient or intended only as short-term bridge funding for operating and technology costs.
- MDR rate
- 0.4% on qualifying person-to-merchant UPI payments above Rs 2,000.
- Effective date
- October 15.
- Who pays
- Merchants, not consumers.
- Maximum fee
- Rs 300 for transactions of Rs 75,000 or more.
- Committee recommendation
- A tiered MDR and revenue framework for UPI and RuPay transactions.
- Industry cost estimate
- NPCI cited about Rs 20,000 crore annually; the committee report cited an industry estimate of Rs 20,700 crore.
- Exclusions and special rates
- Person-to-person transfers, UPI AutoPay and recurring mandates are excluded; listed services such as railways and fuel carry a flat Rs 5 MDR, while capital-market payments carry 0.02%, capped at Rs 300.
