UPI Fees Spark Outcry: Opposition Slams New 0.4% Charge on Merchant Payments
UPI Fees Spark Outcry: Opposition Slams New 0.4% Charge on Merchant Payments
India introduces a 0.4% fee on UPI merchant payments over ₹2,000 from Oct 15, ending years of free service. Opposition MPs call it "anti-people." Get the full story!
Ending nearly six years of completely free digital transactions, the Indian government has announced a new fee on UPI payments. From October 15, a 0.4% charge will be levied on transfers exceeding ₹2,000 made to merchants through the popular Unified Payments Interface (UPI).
This move, announced on September 15, has quickly ignited a political firestorm. Opposition Members of Parliament (MPs) have voiced strong concerns, labeling the decision an "anti-people" move that will impact the entire country. During a Parliamentary Standing Committee on Finance meeting, several MPs raised the issue, with some suggesting it be a topic for the panel's next session.
N.K. Premchandran, an MP from the Revolutionary Socialist Party (RSP) and a member of the committee, emphatically stated that the government
s decision to impose a fee on UPI payments above ₹2,000 for merchants would affect every citizen. He described it as
completely anti-people."
However, it"s crucial to understand who actually pays this fee. The Finance Ministry has clarified that customers making UPI payments will not be charged. This 0.4% fee is a Merchant Discount Rate (MDR), a charge within the merchant payment ecosystem.
Merchants will incur this cost for transactions over ₹2,000.
Crucially, the government has explicitly "ring-fenced" everyday person-to-person (P2P) transactions and small payments from any charges. This means your usual money transfers to friends and family, or small purchases, will continue to be absolutely free. Individuals will also enjoy
unlimited free usage, with no monthly quotas, volume restrictions or tiered caps on free UPI transactions
for P2P payments.
The introduction of MDR on large-value transactions, according to the Reserve Bank of India (RBI), aims to strengthen UPI"s long-term sustainability. While the government maintains this is a merchant-side charge, Opposition leaders like Rahul Gandhi have alleged it"s a "surrender to American pressure" and Congress termed it "loot."
This development marks a significant shift for UPI, which has been a cornerstone of India"s digital payment revolution due to its ease of use and, until now, completely free nature. As October 15 approaches, businesses and consumers will be watching closely to see the full impact of this new policy.
