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Lok Sabha Passes Bill Allowing Charges on UPI Payments

General8 sourcesAug 8, 2026
FlatRigor 518 sources

The Story

The Lok Sabha passed a bill to amend the Payment and Settlement Systems Act, 2007, which allows the government to permit charges on notified electronic payment systems, including UPI. The Payments Council of India stated that consumers and small merchants will continue to use UPI services free of charge. This clarification addresses speculation following the bill's passage. The legislation grants the government the authority to authorize banks to levy charges on certain UPI transactions. Previously, UPI transactions were free for users. Opposition leader Jairam Ramesh criticized the bill, claiming it would lead to hidden costs for consumers and that merchants would pass fees to customers. He also questioned the removal of a zero Merchant Discount Rate (MDR) guarantee. The Payments Council of India issued a statement to debunk what it described as misconceptions surrounding MDR. The industry body assured that consumers and small merchants would continue to use UPI without paying transaction fees. The government has stated that consumers will not directly bear the cost, while opposition leaders have raised concerns that merchants may eventually pass additional charges to customers. Reports suggest the government may permit an MDR between 0.25% and 0.4% on UPI transactions exceeding Rs 2,000 made to businesses. Person-to-person payments are expected to remain outside the scope of any proposed levy. Routine purchases such as milk, vegetables, groceries, or payments for auto-rickshaw and taxi services are not anticipated to be affected. The bill's passage allows for potential future charges on UPI transactions, though the Payments Council of India has assured current free usage for consumers and small merchants.

The Spread

What they agree on

  • The Lok Sabha passed a bill to amend the Payment and Settlement Systems Act, 2007.
  • The bill gives the government the power to permit charges on notified electronic payment systems, including UPI.
  • The Payments Council of India stated that consumers and small merchants will continue to use UPI without paying transaction fees.
  • Congress leader Jairam Ramesh expressed concerns that consumers will bear hidden costs.

Where they split

  • The Wire (India) and Organiser provide more extensive coverage of Jairam Ramesh's specific allegations, including claims of US pressure.
  • News18 and Asian News International focus on the Payments Council of India's assurances regarding free UPI transactions for consumers.
  • The Times of India and Greater Kashmir frame the bill's passage within a broader context of tax framework reshaping and FDI incentives.
  • Some outlets, like News18 and Asian News International, emphasize the Payments Council of India's clarification, while others, like The Wire (India) and Organiser, highlight political opposition to the bill.

Source Perspectives

Left1 source
Center6 sources
Right1 source