Hyderabad: Hyderabad District Congress Committee president Syed Khalid Saifullah has sought withdrawal of the new UPI Merchant Discount Rate framework. He also demanded disclosure of the consultations and representations that preceded the policy change.
Saifullah made the remarks at a press conference at Gandhi Bhavan on Wednesday. TPCC spokesperson Syed Nizamuddin, Bahadurpura Assembly in-charge Rajesh and senior Congress leader Advocate Jagan Mohan Reddy attended the event.
He said UPI had become part of the daily economic activity of crores of Indians. Therefore, he argued that any change in its cost structure required public scrutiny.
“The questions are why the zero-MDR policy was changed, who stands to financially benefit from this change and whether the cost will ultimately reach ordinary consumers,” he said.
UPI MDR debate focuses on policy transparency
Saifullah also referred to concerns raised by the United States about India’s electronic-payment policies. The 2026 National Trade Estimate report from the US Trade Representative said the US had continued to raise concerns about Indian electronic-payment policies.
According to Saifullah, the report discussed policies that the US viewed as favouring domestic suppliers over foreign companies. It also raised concerns about the participation of US payment suppliers in the UPI ecosystem.
Saifullah said those concerns made it reasonable to ask whether electronic-payment policy featured in trade discussions before the MDR decision. He did not present that sequence as proof that US pressure caused the policy change.
The Finance Ministry has rejected claims that external pressure influenced the decision. It described such claims as “unfounded, completely false and misleading” and said the changes would support UPI’s long-term sustainability, technological development and resilience.
Saifullah said the policy process still required greater transparency. He also referred to the Taxation and Other Laws (Amendment) Bill, 2026, which the government introduced in the Lok Sabha on August 4. Parliament later passed the legislation.
The legislation amended the Payment and Settlement Systems Act, 2007. It created an enabling framework for the government to specify electronic payment modes that receive statutory no-charge protection.
Saifullah said the change affected India’s digital-payment architecture. He therefore called for wider public and parliamentary scrutiny.
UPI MDR framework sets charges for selected merchant payments
Under the new framework, eligible person-to-merchant UPI payments above Rs 2,000 will attract a 0.4% MDR from October 15. The charge will have a ceiling of Rs 300 per transaction.
Person-to-person transfers will remain free. Payments up to Rs 2,000 will also remain exempt, while eligible small merchants will continue to receive exemptions under the framework.
Saifullah said the Centre’s assurance that consumers would not directly pay MDR did not settle questions about the wider economic impact. He called for safeguards against merchants transferring the charge to customers.
“On an eligible Rs 4,000 payment, the MDR is Rs 16. The customer may not see a separate MDR entry on the bill, but the question is whether businesses will absorb such recurring costs or recover them through prices, reduced discounts or other means,” he said.
He demanded a strong enforcement and grievance mechanism. Such a system, he said, should stop merchants from directly passing the charge to customers.
Saifullah also questioned who would receive revenue from the new MDR and also said banks, payment service providers and major UPI applications would share the revenue generated through the framework.
He asked the Centre to disclose projected collections and explain the revenue-sharing formula. He also sought details of representations received from banks, payment companies and industry bodies.
The new framework is designed to distribute MDR revenue among participants in the UPI ecosystem. The government has said the revenue will support infrastructure, cybersecurity, innovation and customer service.
Saifullah also referred to political questions that emerged after the January release of Epstein-related records in the United States. He mentioned the subsequent controversy over references involving Indian political figures.
Union Minister Hardeep Singh Puri has denied wrongdoing over his documented contacts with Jeffrey Epstein. The Ministry of External Affairs has also rejected insinuations linked to a reference concerning Prime Minister Narendra Modi’s 2017 Israel visit.
Saifullah said Congress was not presenting that chronology as proof that the disclosures or US pressure caused the MDR decision. Instead, he called for publication of the complete policy trail to address questions surrounding the decision.
“When a policy that kept UPI merchant payments free for years is changed, citizens have every right to ask why it changed, who asked for the change, what representations were received and who will financially benefit,” he said.
The Hyderabad DCC backed the Congress demand for a rollback. Saifullah also sought disclosure of representations from banks, payment companies, industry bodies, foreign governments and trade negotiators concerning UPI pricing and the earlier zero-MDR policy.
“The UPI revolution was built through the participation of crores of Indians. Any major change to its cost structure must be transparent, properly debated and designed in the interests of citizens, consumers and small businesses,” he said.
The demand comes as the new MDR framework is scheduled to take effect on October 15. The government has maintained that consumers will continue to use UPI without a direct transaction charge, while selected merchant payments will carry MDR.
