Pinarayi Vijayan slams UPI merchant fee over Rs 2,000 as daylight robbery

Pinarayi Vijayan has opposed the Centre's new UPI fee on high-value merchant payments. He said the charge will burden consumers and chiefly benefit corporates.

Former Keralam Chief Minister Pinarayi Vijayan on Thursday criticised the Centre's decision to impose a fee on certain high-value UPI merchant transactions, calling it "daylight robbery" and urging the government to withdraw the move. In a Facebook post, he said the decision was unacceptable and alleged that the government was trying to turn the UPI system into a source of large profits for fintech companies.

The Centre has introduced a 0.4 per cent Merchant Discount Rate on specified person-to-merchant UPI transactions above Rs 2,000 from October 15, ending the zero-MDR regime for such high-value merchant payments. Person-to-person transactions will remain free, while payments to merchants up to Rs 2,000 and transactions covered under the zero-MDR framework for small merchants will also remain free. The Finance Ministry on Wednesday rejected allegations of foreign influence behind the decision and said the new MDR framework was meant to provide a level playing field for stakeholders in the digital payments ecosystem.

Vijayan said UPI had been promoted by assuring people that transactions would remain completely free, after which ordinary people, unorganised workers and small traders had largely shifted to digital payments. "After forcing people to shift to UPI transactions in the name of Digital India, the government is now trying to turn it into a source of revenue," he alleged.

He also accused the Centre of protecting the interests of foreign financial agencies and private banks, and questioned the purpose of the Digital India campaign launched after demonetisation. Describing the proposed 0.4 per cent fee on merchant transactions above Rs 2,000 as "daylight robbery", he said that although the charge was officially to be paid by merchants, it would eventually be passed on to consumers through higher prices.

"This would ultimately put the entire financial burden on the common people," he said, adding that the UPI charge had come after banks had already been imposing minimum-balance penalties and ATM charges. He urged the Centre to immediately withdraw what he described as a decision aimed at benefiting corporates at the expense of the people.

The row over the new UPI charge centres on high-value merchant payments above Rs 2,000, with the Centre saying smaller transactions and person-to-person payments will stay free, while Vijayan has attacked the move as a burden that will eventually fall on consumers.