India's Lok Sabha Passes Bill Enabling Charges on UPI Payments
The Lok Sabha approved the Payment and Settlement Systems (Amendment) Bill, 2026, by voice vote, granting the central government authority to permit banks and payment service providers to levy Merchant Discount Rates (MDR) on the Unified Payments Interface (UPI) and other notified electronic payment modes. Finance Minister Nirmala Sitharaman introduced the amendment, stating that MDR would apply only to merchants, not end‑users, and would help fund infrastructure, innovation and security for the digital payments ecosystem. Congress leader Jairam Ramesh criticised the bill, alleging it removes the statutory guarantee of free UPI transactions and could shift costs to ordinary users. Sitharaman rejected the claim as a “canard” and warned the party for raising the issue outside Parliament. RBI Governor Sanjay Malhotra said it is premature to comment on any definitive charges. Data show UPI processed 23.6 billion transactions worth Rs 29.9 trillion in July. Proposals under consideration include an MDR of 0.3‑0.5 % on transactions above Rs 2,000 for merchants with annual turnover over Rs 1.5 crore. A think‑tank warned against US pressure influencing India’s UPI policy, suggesting targeted alternatives instead of a blanket merchant charge.
Entities: Google Pay · Jairam Ramesh · Lok Sabha · Nirmala Sitharaman · Payment and Settlement Systems (Amendment) Bill 2026 · Payment and Settlement Systems (Amendment) Bill, 2026 · Payment and Settlement Systems Act · PhonePe · Reserve Bank of India · Unified Payments Interface · Unified Payments Interface (UPI)
Claims
What the coverage asserts, and how well corroborated each claim is across sources.
- [● 3 SOURCES] Jairam Ramesh alleged the amendment removes the statutory guarantee that UPI transactions are free of charges, opening the door for future MDR on digital payments. (belongs)
- [● 3 SOURCES] Ramesh claimed the amendment could open the door for future imposition of MDR on digital payments, potentially passed to ordinary users. (Jairam Ramesh)
- [● 3 SOURCES] Sitharaman criticized the Congress for raising the issue outside Parliament and said it could have been debated on the floor of the Lok Sabha or Rajya Sabha. (Finance Minister Nirmala Sitharaman)
- [● 3 SOURCES] Merchant Discount Rate (MDR) applies only to merchants, not to end users or customers of UPI. (belongs)
- [● 3 SOURCES] The government argues that charging MDR is necessary to make UPI financially sustainable. (f7b826ad-fc6e-4dc4-87e4-15bca52ae775, ad1e84b1-8164-47e4-808d-bdb6e670c230, a177fd92-a5c6-449c-bc5a-f2cc0b798aeb)
- [● 5 SOURCES] The Taxation and Other Laws (Amendment) Bill 2026 includes provisions related to UPI transaction charges. (30d456b1-1f1c-465d-994e-57ca5d9c388f, f3d28ade-3254-4795-a0ca-af2d1f7c1465)
- [● 3 SOURCES] The MDR measure will enable banks and fintech companies to invest more in infrastructure, innovation and security, benefiting all UPI users. (Finance Minister Nirmala Sitharaman)
- [● 3 SOURCES] The RBI transferred a surplus of Rs 2.86 lakh crore to the Centre in 2025‑26. (belongs)
- [● 2 SOURCES] The Lok Sabha passed the Payment and Settlement Systems (Amendment) Bill, 2026, by voice vote. (belongs)
- [● 2 SOURCES] Proposed MDR rates could be 0.3 % to 0.5 % on UPI transactions above Rs 2,000 for merchants with annual turnover over Rs 1.5 crore. (belongs)
- [● 2 SOURCES] UPI processed 23.6 billion transactions worth Rs 29.9 trillion in July. (belongs)
- [○ 1 SOURCE] RBI Governor Sanjay Malhotra said it is premature to make definitive comments on UPI charges. (belongs)