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Informist, Thursday, Aug. 6, 2026

 

NEW DELHI – The Lok Sabha Thursday passed a piece of legislation that authorises the government to permit banks and other service providers to levy charges on payments through the Unified Payments Interface and other notified electronic payment modes. The bill, passed amid a din, amends the section of the Payment and Settlement Systems Act, 2007, that barred banks and other payment service providers from charging consumers for using electronic modes of payment.

 

The Taxation and Other Laws (Amendment) Bill, 2026, which contains the amendment, was passed by voice vote without a discussion, minutes after the Lok Sabha reassembled at 1400 IST after an adjournment in the morning. The amended Section 10A of the Payment and Settlement Systems Act now reads: "No bank or system provider shall impose, whether directly or indirectly, any charge upon a person making or receiving a payment by one or more electronic modes of payment as the Central Government may, by notification, specify." The revision now gives the government the power to decide which electronic modes of payment should be exempted from charges by banks or system providers.

 

The opposition Indian National Congress slammed the move, alleging that it removes the statutory guarantee that keeps Unified Payments Interface transactions free. Congress General Secretary Jairam Ramesh, member of the Rajya Sabha, said the amendment opens the door to Merchant Discount Rate charges, which can easily be expanded to all payments in the future. "The cost will inevitably be borne by ordinary people who will now have to pay to use UPI transactions," he wrote on X. 

 

Jairam refused to buy the government's claim that this is required to keep the Unified Payments Interface financially sustainable, saying the Reserve Bank of India has the financial capacity to sustain the ecosystem without imposing charges on merchants or consumers. "Indeed, the real reason why this amendment is being introduced is perhaps more concerning. It follows the US Trade Representative's 2026 report which criticises UPI and RuPay for being free and accuses them of having driven out American payment platforms like Visa and MasterCard," he said.

 

"Is the prime minister seeking to dilute UPI and open the digital payments sector to American businesses under pressure from his good friend Donald Trump?" the Congress lawmaker said.  End

 

Reported by Asim Khan

Edited by Rajeev Pai

 

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