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Rahul Gandhi Demands Rollback of New UPI Merchant Charges
The government has created a fee for some large payments made to shops through UPI.
UPI is the system people use to pay by scanning a QR code or using a payment app.
The fee is charged to merchants, not directly to customers.
The government says customers can still send money to friends for free.
It also says banks should not pass the fee on to customers.
Rahul Gandhi and other opposition leaders want the fee withdrawn.
They say the decision may help companies linked to the United States and may result from foreign pressure.
The government rejects that claim.
It says India makes its UPI decisions independently to support an affordable digital-payments system.
Rahul Gandhi urged Prime Minister Narendra Modi to withdraw the 0.4% merchant discount rate on eligible UPI payments.
The fee applies to merchant UPI transactions above Rs 2,000, with charges capped at Rs 300 for payments of Rs 75,000 or more.
The Finance Ministry said UPI remains free for consumers and that person-to-person transfers will not be charged.
Opposition leaders alleged the charges reflected foreign influence and would benefit US-linked payment companies.
The government denied foreign influence, saying the policy aims to create a self-sustaining and affordable digital-payments ecosystem.
- Who
- Rahul Gandhi and other opposition leaders criticized the Union government’s UPI fee framework; the Ministry of Finance defended it.
- What
- A 0.4% merchant discount rate was announced for merchant UPI transactions above Rs 2,000, capped at Rs 300 for transactions of Rs 75,000 or more.
- Where
- India.
- When
- The criticism and government response were reported on Wednesday, September 16, 2026; the government announcement was made on Monday.
- Why
- The government said the framework is intended to build a self-sustaining, inclusive and affordable digital-payments ecosystem, while the opposition alleged foreign influence and benefits for US-linked companies.
Opposition criticism
Government response
Reason for the charges
Opposition criticism
Opposition leaders alleged that the charges resulted from American pressure and would help US-linked companies increase their valuations.
Government response
The Ministry of Finance said claims of foreign influence were false and that India’s UPI policy decisions are made independently.
Effect on users
Opposition criticism
Rahul Gandhi and other opposition leaders described the measure as a tax or charge on Indians and demanded its rollback.
Government response
The government said consumers would not be charged, person-to-person payments would remain free, and banks had been advised not to pass the fee to customers.
Impact on payment competition
Opposition criticism
Congress leaders questioned whether the charges would benefit PhonePe and Google Pay or allow US card companies to compete with UPI.
Government response
The government said the framework was designed to build a self-sustaining, inclusive and affordable digital-payments ecosystem.
Key facts
- Merchant fee
- 0.4% merchant discount rate on eligible UPI transactions above Rs 2,000.
- Fee cap
- Rs 300 per transaction for payments of Rs 75,000 or more.
- Consumer charges
- The Finance Ministry said UPI remains free for consumers.
- Person-to-person payments
- The government said these transactions remain free regardless of the amount transferred.
- Large merchant transactions
- Payments above Rs 2,000 represented nearly two-thirds of the value of person-to-merchant UPI transactions in 2025-26.
- Market share cited
- PhonePe was listed at 48.9% and Google Pay at 37.7% of India’s UPI payment-app market.
Quotes
Supriya Shrinate
Congress leader who criticised the UPI charges
“People in India who are already struggling with inflation and unemployment are now being forced to boost the valuation of an American company before they sell shares to the public.”
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“Income Tax rebates are delayed. Taxes are charged on UPI in the name of convenience fees. We are the World Bank’s biggest borrower.”
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Ministry of Finance
Indian government ministry defending the UPI policy
“India’s UPI policy decisions are made independently, with the clear goal of building a self-sustaining, inclusive, and affordable digital payments ecosystem.”
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Sources
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