Bengaluru (Karnataka) [India], September 16 (ANI): All India Congress Committee (AICC) General Secretary KC Venugopal on Wednesday launched a scathing attack on the Union government over the proposed transaction fee on Unified Payments Interface (UPI) transactions, alleging that the Centre has “completely surrendered” to American pressure at the expense of ordinary citizens.
His remarks came as Karnataka Pradesh Congress Committee (KPCC) leaders and party workers staged a massive protest in Bengaluru against the Central government following the introduction of the Merchant Discount Rate (MDR) on large-value UPI transactions.
Speaking to reporters during the demonstration, KC Venugopal said, “Completely surrendered to the US. It’s a clear-cut case, again the clear-cut case of surrendering to the US. India’s interest is completely surrendering to the US; that is what… Completely, they are penalising the people of India, basically.”
Earlier in the day, Senior Congress leader Jairam Ramesh also launched a sharp attack on Prime Minister Narendra Modi over his administration’s economic and diplomatic posture toward the United States, redefining the acronym NOTA as “Narendra’s Ongoing Trump Appeasement” and alleging that the Centre has capitulated to American pressure by ending zero-MDR on Unified Payments Interface (UPI) transactions.
The Congress leader alleged that instead of countering Washington’s aggressive trade measures, the Union government has succumbed to US demands by removing the zero Merchant Discount Rate (MDR) regime for UPI transactions to benefit American card networks.
“Here, the Modi Govt has given in to a US demand to get rid of zero MDR and charge for UPI. The U.S. Trade Representative earlier this year criticised UPI for being free and having driven out Visa and Mastercard,” Ramesh wrote.
Questioning the rationale behind the proposed 0.4 per cent MDR on UPI transactions, Ramesh asked, “Why 0.4% MDR? Is it because debit card MDR is also 0.4%? Is this being done to enable US card companies to compete with UPI?”
Dismissing the government’s justification that transaction charges are necessary to make the digital payments infrastructure financially viable, Ramesh pointed out that the operational costs represent only a small fraction of the central bank’s annual surplus transfers.
“Is this going to make UPI ‘sustainable’ as the Govt claims? The estimated cost of running the entire UPI ecosystem is around Rs 20,000 crore annually. This is less than 10% of what the RBI has been transferring to the Union Govt in the past few years so as to show healthy public finances for the Modi Govt,” he argued.
The National Payments Corporation of India (NPCI) on Tuesday introduced a new Merchant Discount Rate (MDR) framework, under which UPI merchant transactions above Rs 2,000 will attract an MDR of 0.4 per cent, while consumers will continue to transact free of cost using UPI.
The revised UPI MDR framework will come into effect from October 15, 2026, and will apply to select merchant transactions.
Under the new framework, an MDR of 0.4 per cent will apply to Person-to-Merchant (P2M) UPI transactions above Rs 2,000, with the MDR capped at Rs 300 per transaction. (ANI)
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