States » EastPosted at: Sep 16 2026 5:44PM


CPI demands rollback of UPI merchant fee, alleges move made under US pressure

Patna, Sep 16 (UNI) The Communist Party of India (CPI) on Wednesday demanded that the government withdraw the newly announced merchant charges on certain UPI transactions.
CPI state secretary Ramnaresh Pandey alleged that the move was taken under US pressure and would eventually burden traders and consumers.
Pandey said the decision to introduce charges on eligible UPI merchant transactions was "unfortunate" and questioned the rationale for turning a public digital payments infrastructure into a fee-based system.
The National Payments Corporation of India (NPCI) has announced that a revised Merchant Discount Rate (MDR) framework will apply from October 15 to specified person-to-merchant UPI transactions above Rs 2,000.
The MDR is set at 0.4 per cent, subject to a cap, while consumers will not be directly charged and person-to-person UPI transactions remain exempt.
Pandey, however, argued that merchants could ultimately seek to recover additional costs from customers despite the stated framework.
He also questioned the need to levy charges based on transaction value, saying that processing costs do not necessarily rise proportionately whether a payment is Rs 10 or Rs 10,000.
He said NPCI was a well-capitalised institution and argued that there was no justification for imposing charges on a public digital payments system.
The CPI leader also linked the development to long-standing US concerns over India's digital payments framework.
The Office of the US Trade Representative has previously raised concerns about Indian policies governing electronic payment services, saying they appeared to favour domestic suppliers over foreign providers.
Its 2026 National Trade Estimate report specifically referred to UPI and the market-share framework for third-party payment applications.
Pandey alleged that US payment companies had a commercial interest in changes to India''s UPI ecosystem and accused the Modi government of compromising India''s digital sovereignty.
These are political assertions by the CPI leader; the USTR material establishes that the US has raised concerns about India''s electronic-payment policies, but does not establish that the newly announced MDR was introduced because of US pressure.
He further criticised the government''s approach to large digital payment platforms, citing PhonePe and Google Pay and their substantial share of UPI transactions.
The USTR''s 2026 report said that, as of December 31, 2025, two US-owned electronic payment service providers together processed more than 80 per cent of UPI transactions.
Pandey said UPI had been developed as an interoperable, low-cost public digital infrastructure and should remain accessible without additional charges.
He demanded that the government reconsider the new MDR framework and maintain UPI as a free payment facility.
The new NPCI framework, however, does not impose a blanket charge on all UPI payments.
The announced MDR applies to specified merchant transactions above Rs 2,000, while payments below that threshold and person-to-person transactions remain exempt. UNI RS SAS
Tags: #CPI demands rollback of UPI merchant fee# alleges move made under US pressure
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