Rahul Gandhi, Congress Accuse Government of Opening Door to UPI Fees

Congress leader Rahul Gandhi on Tuesday accused the government of quietly clearing the path for charges on UPI payments, alleging that a "compromised" Prime Minister Narendra Modi was once again yielding to American pressure.

His attack followed a gazette notification dated September 14 under which no bank or payment system provider may impose, directly or indirectly, any charge on a person making or receiving a payment through a RuPay debit card or a UPI transaction of up to ₹2,000. The notification does not state whether merchants will bear charges on transactions above that threshold. Until now, UPI transactions have carried no charge regardless of value.

In a Hindi post on X, Mr. Gandhi said the government had paved the way for a Merchant Discount Rate (MDR) on merchant UPI transactions above ₹2,000. Even if such transactions were only about 5% of volumes, he said, they accounted for nearly 65% of UPI's total transaction value. While the government says customers will not be charged, he argued that fees levied on shopkeepers would ultimately be passed on to buyers through higher prices.

Mr. Gandhi noted that American payment companies have long opposed India's zero-MDR policy and claimed the government had now opened the way to reversing it. Drawing a parallel with a U.S. trade deal, he alleged that the Prime Minister was surrendering to American pressure.

Congress general secretary in-charge of communications Jairam Ramesh said the party had flagged the issue on August 6, 2026, and that the government was now using new laws passed by Parliament to begin charging for UPI. He pointed out that the notification, issued under the amended Payment and Settlement Systems Act, 2007, bars charges only for transactions below ₹2,000 and offers no explicit protection above that cap.

Mr. Ramesh said the stage was being set for all users to pay for UPI, warning that the ceiling could be changed through another notification and that person-to-person payments could also attract charges. He accused the government of a lack of honesty and transparency and asked whether the move was intended to open digital payments to American companies to appease U.S. President Donald Trump.

The notification follows an amendment to Section 10A of the Payment and Settlement Systems Act, 2007, creating an enabling framework for an MDR on UPI and other notified electronic payment modes. The amendment Bill was passed during the Monsoon Session, which ended on August 13, 2026. After its passage, the government said the UPI and Services Steering Committee, headed by the National Payments Corporation of India, would decide MDR rates.

Explaining the rationale, the government said rising transaction volumes demand continuous upgrades in cybersecurity, fraud prevention and infrastructure, and that charges were needed for market expansion and self-sustainability. It said a self-sustaining revenue model would encourage more companies to expand operations, that reliance on subsidies alone was not viable for the next phase of growth, and that a balanced framework was needed to keep UPI robust, inclusive and future-ready.

UPI is operated by the NPCI, an initiative of the Reserve Bank of India and the Indian Banks' Association.

Last month, the Congress had opposed the Taxation and Other Laws (Amendment) Bill before its passage, with Mr. Ramesh arguing that it removed the statutory guarantee keeping UPI free and opened the door to MDR charges that could later be widened to all payments. Finance Minister Nirmala Sitharaman had responded that MDR applies to merchants and not to customers, and that it would help banks and fintech firms invest more in infrastructure, innovation and security. She had also said the NPCI-headed steering committee was yet to decide on MDR rates, which would happen only after Parliament passed the Bill.