Spasht.
UPI merchant fee row

Sitharaman says UPI fee is 'not a tax' and accuses opposition of spreading confusion

21 Sept 2026 · 4 outlets · 1 min read

AI illustration
In 30 seconds
  1. Sitharaman: the fee is a charge between payment operators, not a government levy.
  2. She said she had already clarified the issue in Parliament.
  3. Officials ruled out reconsidering the fee at that point.

Finance Minister Nirmala Sitharaman said on 21 September 2026 that the UPI merchant fee is 'neither a tax nor a cess' and the money will not go into the Consolidated Fund of India, the government's main account. She said the fee is charged by service providers between operators and will not be passed on to customers. She accused opposition parties of spreading misconceptions and urged people to stay alert. A senior official told PTI there was 'no question of a re-think'.

What it means for India

The government's position is that a customer's bill should not change; how strictly that is enforced will decide whether shoppers end up paying.

Checked

Claim by claim

?Unverified

The fee will not be passed on to consumers.

Said by Nirmala Sitharaman, Finance Minister

Banks have been told to ensure merchants do not pass the fee on, but the fee has not started, so compliance cannot yet be checked. Opposition leaders and trader groups argue costs will reach customers.

DD News · The Times of India · PIB
✓Verified

The money collected through the fee will not go to the Consolidated Fund of India.

Said by Nirmala Sitharaman, Finance Minister

Consistent with the government's framework, which says the fee is shared among banks, payment service providers and UPI apps.

The Times of India · PIB
In their own words

What each side says

Finance Minister

Sitharaman said, 'It is neither a tax nor a cess; the funds will not be deposited into the Consolidated Fund of India,' and that 'the burden does not fall on the customer'.

The Times of India
Opposition

CPI general secretary D. Raja said experience shows merchants always find ways to pass on new costs, and demanded that UPI payments stay free.

The Indian Express
Honest gaps

Not yet known

  • ?How banks will check that merchants are not adding the fee to customers' bills.
Who reported this

Sources

Left-leaning · 1Centre · 2Official record · 1

4 outlets across the spectrum. Leanings are a rough guide to who reported it, not a verdict on accuracy.

  1. DD NewsUPI users will not be charged MDR, says Finance Minister Sitharaman
  2. The Times of India'No burden for consumers': Sitharaman clarifies who will pay MDR on UPI transactions
  3. PIBUPI Continues to Remain Free for Peer to Peer Transactions and 96% of Merchant Transactions
  4. The Indian ExpressUPI fee hike: Opposition alleges US pressure; false, says government

Spasht writes original summaries. Follow the links to read each outlet's own report. Revision 1.