Rahul Gandhi has targeted the central government over potential UPI fees. He accused the government of quietly opening a way to impose MDR (Merchant Discount Rate) on merchant UPI payments above ₹2,000. However, the government has not yet announced any final fees.
The issue is significant because UPI transactions above ₹2,000 represent approximately 5% of the total transaction volume, but represent approximately 65% of the total transaction volume. This means that if a fee is imposed on this category, payments with lower numbers but higher amounts could be affected. Rahul Gandhi has accused the Modi government of caving to US pressure on this issue. Meanwhile, the BJP has rejected all Congress claims.
A legislative change in Parliament empowers the government to determine fees for certain digital payment methods. This does not mean that UPI has been charged immediately.
The government has stated that no fees will be levied on UPI payments from the average consumer, and that P2P payments will remain free.
Rahul Gandhi alleges that the fee will be levied on shopkeepers, but the burden may eventually be passed on to customers. Citing the past stance of American payment companies, he launched a scathing attack on Prime Minister Narendra Modi, linking it to US pressure.
BJP leader Amit Malviya refuted Rahul Gandhi and the Congress’s claims on X, stating that there is no government order imposing a 0.5% tax or charge on UPI payments above ₹2,000. According to him, the charge of ₹25 on ₹5,000 and ₹50 on ₹10,000 is based on a hypothetical 0.5% rate. Malviya said that the September 14 notification only provided zero-charge protection to UPI and RuPay transactions up to ₹2,000. He also clarified that person-to-person UPI payments are free for any amount, and if MDR is implemented in the future, it will be for limited merchant transactions, not customers. He explained that the government is continuously providing incentives to the payment ecosystem to keep UPI free. From FY22 to FY24, the government provided incentives of ₹1,389 crore, ₹2,210 crore, and ₹3,631 crore, respectively. In 2025-26, incentive support of ₹2,196.21 crore was provided, and a provision of ₹2,000 crore has been made for FY27.
According to reports, the option of imposing an MDR of approximately 0.25% to 0.4% on merchant payments above ₹2,000 is under discussion. However, the rate and implementation date are not yet finalized.
The government states that if MDR is implemented, it will be at a nominal rate for limited merchant transactions. In August, the Finance Ministry stated that no fees would be charged to UPI users and that most merchant transactions would also be exempt from the fee.
At present, MDR is not applicable on UPI payments above ₹2,000. The government has merely created a legal framework under which fees may be imposed on a limited category of merchant payments in the future.