Archive · 17 Sep 2026
Rahul Gandhi Demands Rollback of New UPI Merchant Charges
India has introduced a small fee for some large payments made to businesses using UPI.
UPI is the system used for payments through apps and QR codes.
The fee is 0.4% for eligible merchant payments above ₹2,000.
It is paid by merchants, and the government says banks should not make customers pay it.
Payments between people will remain free.
The government also says small merchants and most everyday payments will not be charged.
Rahul Gandhi and other opposition leaders want the fee cancelled.
They believe the decision could help American-owned payment companies and may have resulted from US pressure.
The government denies this and says the money will help maintain and improve the payments system.
Rahul Gandhi urged Prime Minister Narendra Modi to withdraw the 0.4% merchant discount rate on eligible UPI transactions.
The fee applies to merchant transactions above ₹2,000 and is capped at ₹300 for payments of ₹75,000 or more.
The Finance Ministry said UPI remains free for consumers, person-to-person transfers, and most everyday merchant payments.
Congress leaders alleged the charges reflected US pressure and would benefit American-owned payment companies including PhonePe and Google Pay.
The government rejected claims of foreign influence and said the fee would support a self-sustaining, secure and affordable digital-payments ecosystem.
- Who
- Rahul Gandhi and other Congress and opposition leaders criticized the Union government; the Ministry of Finance defended the policy.
- What
- A 0.4% merchant discount rate was introduced for eligible merchant UPI and, according to one report, RuPay transactions above ₹2,000, with specified caps and exemptions.
- When
- The criticism and government response were reported on Wednesday, September 16, 2026; the framework was announced on Monday and further details were issued on Tuesday and Wednesday.
- Where
- India.
- Why
- The government said the charges would help make digital payments self-sustaining, secure and affordable, while opposition leaders alleged US pressure and benefits for American-owned payment companies.
Opposition criticism
Government response
Foreign influence
Opposition criticism
Rahul Gandhi, Supriya Shrinate and other opposition leaders alleged that US pressure over India’s zero-MDR policy led to the charges and that the measure would benefit American companies.
Government response
The Finance Ministry called claims of foreign influence false and said India makes its UPI policy decisions independently.
Who benefits
Opposition criticism
Congress argued that PhonePe and Google Pay, which together were cited as holding about 86% of the market, would see higher revenues, earnings or valuations; it also questioned whether US card companies would gain greater competition with UPI.
Government response
The government said the fee would fund digital-payment infrastructure, cybersecurity, rural and small-merchant support, and broader UPI adoption.
Impact on users and merchants
Opposition criticism
Opposition leaders described the measure as a tax or charge imposed on Indians and demanded its withdrawal, citing concerns about inflation and the cost of living.
Government response
The government said only larger merchant transactions would attract the nominal fee, while person-to-person transfers, payments below ₹2,000, and many protected categories would remain free.
- Merchant rate
- 0.4% on eligible merchant transactions above ₹2,000.
- Maximum charge
- ₹300 per transaction for payments of ₹75,000 or more.
- Consumer status
- The Finance Ministry said UPI remains free for consumers and banks should prevent merchants from passing on the MDR.
- Person-to-person payments
- Transfers between individuals remain free regardless of the amount.
- Small merchants
- Vendors earning up to ₹1 lakh per month through UPI QR codes continue to receive zero-charge treatment, according to the ministry.
- Market share cited
- PhonePe was listed at 48.9% and Google Pay at 37.7% of India’s UPI payment-app market.
- Transaction volume
- The Finance Ministry said India recorded 24.5 billion UPI transactions in the previous month.
