Opposition MPs flag concerns over proposed UPI merchant payment fee

Opposition MPs on Wednesday raised concerns over the government's decision to introduce a fee on UPI payments above ₹2,000 made to merchants, describing the move as anti-people and warning that it would affect the country's entire population.

The issue was raised at a meeting of the Parliamentary Standing Committee on Finance. Its chairman, Bhartruhari Mahtab, said some members flagged the matter and indicated it could be taken up at the panel's next meeting.

RSP MP N.K. Premchandran, a member of the committee, said the decision would have a widespread impact. "It is a completely anti-people decision," he said.

The government on Tuesday introduced a 0.4% fee on transfers worth more than ₹2,000 made to merchants through UPI from October 15, ending nearly six years of fully free UPI payments. Everyday person-to-person transactions and small payments have been explicitly kept out of the charge's ambit.

The Finance Ministry said customers would not have to pay any charge when making such payments through UPI. It described the merchant discount rate (MDR) as a charge within the merchant payment ecosystem rather than a charge on customers.

Individuals will continue to have unlimited free usage, with no monthly quotas, volume restrictions or tiered caps on free UPI transactions, the Ministry said.