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Ashneer Grover Slams UPI Fee as Consumer “Tax”

By Drooid · Sep 16, 2026, 12:02 PM UTC · How we work

Summary

Ashneer Grover Slams Fee

Ashneer Grover criticised the new merchant fee on UPI payments above INR2,000.
He argued the levy should be called a “tax” and will ultimately be borne by consumers.
The fee imposes a 0.4% merchant discount rate on transactions over INR2,000 starting October 15, affecting about 4% of merchants.
Government said person-to-person UPI transfers remain free regardless of amount.

Summary

Parliament Enables MDR

Parliament amended Section 10A of the Payment and Settlement Systems Act, 2007 during the Monsoon Session, enabling merchant discount rates.
A UPI and Services Steering Committee, headed by NPCI, will decide future merchant discount rates.
UPI is now accepted in 11 countries, including Singapore, UAE, France, Mauritius, Nepal, Bhutan, Qatar, Sri Lanka, Cambodia, Greece, Uzbekistan.
Transaction value grew from Rs 0.07 lakh crore in FY17 to Rs 314 lakh crore in FY26, a 4,000-fold increase.

History

Historical Context

In April 2009 the National Payments Corporation of India was created, and after RBI’s 2012 vision it launched the open-architecture Unified Payments Interface on 11 April 2016, quickly scaling to 2.5 billion transactions in FY 2018. The growth prompted the 2007 Payment and Settlement Systems Act’s Section 10A to be amended by Parliament, reopening the debate over merchant discount rates that entrepreneur Ashneer Grover has recently criticised.

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Ashneer Grover Slams Fee

Ashneer Grover criticised the new merchant fee on UPI payments above INR2,000.
He argued the levy should be called a “tax” and will ultimately be borne by consumers.
The fee imposes a 0.4% merchant discount rate on transactions over INR2,000 starting October 15, affecting about 4% of merchants.
Government said person-to-person UPI transfers remain free regardless of amount.

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