‘Quietly opened the door to UPI fees’: Rahul Gandhi slams Modi govt, Centre defends notification

Congress Leader of Opposition Rahul Gandhi has criticized the Narendra Modi government for allowing fees on Unified Payments Interface (UPI) transactions. In a post on X, Gandhi stated that the government has indirectly opened the door to imposing merchant discount rate (MDR) fees on UPI transactions above ₹2,000. He argued that even a 5% share of the volume of transactions above ₹2,000 would account for nearly 65% of UPI's total transaction value.

Gandhi accused the Modi government of being "compromised," likening it to his party's stance on the US Trade Deal. Party President Mallikarjun Kharge echoed similar sentiments, saying the Modi government's "loot" has now extended to UPI.

The Centre recently notified changes to UPI transactions, stating that banks and payment system providers will not impose additional charges on UPI transactions up to ₹2,000 or payments made via RuPay debit cards. However, the specifics of the notification regarding transactions above ₹2,000 remain unclear. Currently, there are no charges on UPI transactions, regardless of the amount.

The notification was issued in response to an amendment to Section 10A of the Payment and Settlement Systems Act, 2007, which legalizes the possibility of charging MDR on UPI transactions and other electronic payment methods under the law. The government maintains that the charges are necessary to ensure the financial sustainability of the sector and promote market expansion, encouraging more companies to invest in cybersecurity, fraud prevention, and digital infrastructure.