New Delhi: There is widespread discussion regarding charges on UPI transactions. Everyone from the Reserve Bank of India (RBI) to Finance Minister Nirmala Sitharaman has issued clarifications on the matter. Meanwhile, the research institute Global Trade Research Initiative (GTRI) has also issued a stern warning to the government concerning UPI policies.
GTRI has stated that India should not alter its UPI policies by yielding to US pressure. According to the think tank, the country must safeguard competition, policy autonomy, and the long-term viability of the digital payment ecosystem.
This comment follows the passing of the bill amending the Payment and Settlement Systems Act, 2007 (Taxation and Other Laws Amendment Bill) in the Lok Sabha on Thursday. This amendment empowers the government to authorise banks and service providers to levy charges on UPI and other notified electronic payment methods. In effect, merchants would have to pay charges to banks and service providers such as Paytm, PhonePe, Google Pay, etc. for payments made via UPI.
Currently, banks and payment system providers are not permitted to levy charges (MDR) on users or merchants for payments made via UPI or RuPay debit cards. This zero-charge model has played a pivotal role in rapidly boosting digital payments among small shopkeepers, street vendors, and ordinary consumers.
Financial systems require capital for cybersecurity, server maintenance, fraud prevention, and dispute resolution. GTRI suggests that this financial requirement could be met through targeted budgetary support, government incentives, or by levying a nominal charge only on large, high-turnover merchants, rather than imposing fees on ordinary merchants.
India’s UPI and RuPay systems, as well as Brazil’s Pix system, were criticised in the Office of the United States Trade Representative’s (USTR) ‘National Trade Estimate Report 2026’. Ajay Srivastava, founder of GTRI, states that India should not alter its regulations to protect the commercial interests of foreign companies like Visa and Mastercard.
GTRI emphasised the importance of maintaining rules that require payment data to be stored within the country. Keeping sensitive financial data secure within India strengthens fraud investigation capabilities, cybersecurity, and national security.
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