Trader associations and opposition parties have pushed back against the government’s decision to introduce a 0.4 per cent fee on UPI transactions above Rs 2,000, even as the Centre made clear there was “no question of reversing the decision.”
The charge came into effect on Tuesday as part of a new framework for large digital merchant payments, ending the zero Merchant Discount Rate regime that had been in place since January 2020. The fee applies to UPI transactions to retailers exceeding Rs 2,000 and is capped at Rs 300 for payments of Rs 75,000 and above.
A Public Interest Litigation has since been filed in the Supreme Court challenging the decision, alleging the levy was introduced without adequate statutory safeguards, transparency or public consultation. The petition names the Centre, the Reserve Bank of India, the National Payments Corporation of India and the UPI and Services Steering Committee as respondents.
Traders’ associations across Delhi voiced strong opposition. Kamla Nagar Market Association president Nitin Gupta said traders had supported the government’s digital payments push but would now promote cash transactions if forced to bear an additional charge, noting they already pay transaction fees and 18 per cent GST. New Delhi Traders Association general secretary Amit Gupta said the charge would make UPI a costly option for traders already working on thin margins. Khan Market Association president Sanjiv Mehra said traders, already opposing MDR on credit card transactions, would now consider using cheques and other banking channels for larger payments.
The political opposition was equally sharp. Leader of Opposition Rahul Gandhi accused Prime Minister Narendra Modi of imposing the charge to please US President Donald Trump, with the Congress alleging the move amounted to “Narendra’s Ongoing Trump Appeasement.” Communist Party of India general secretary D Raja demanded the government withdraw what he called an “anti-people decision,” claiming it had been introduced under US pressure.
The Finance Ministry rejected these claims, stating in a post on X that India’s UPI policy decisions are made independently, with the goal of building a self-sustaining, inclusive and affordable digital payments ecosystem.
(Source: The Tribune)
