The Modi government’s move to impose charges on UPI (Unified Payments Interface) transactions is an attack on ordinary people. On August 6, the government passed the bill in the Lok Sabha to allow charges on payments made through UPI apps.

This bill was passed without hearing the views of the opposition and without any debate. It was pushed through by voice vote in an authoritarian manner. Through this amendment, the government is punishing ordinary people by collecting charges from them and handing over the benefits to corporates.

IMPACT ON COMMON PEOPLE

The rulers claim that the charges will only be collected from the merchants. But in practice, any charge levied on the merchants will ultimately fall on the heads of ordinary people.

As part of the Taxation and Other Laws Amendment Bill, 2026, the Payment and Settlement Systems Act, 2007 was amended. Until now, there was a law that prohibited charging fees on UPI transactions. On August 6, the government changed that law. Now, if the government decides, charges can be imposed. Initially, reports suggest that only UPI transactions above ₹2,000 will attract charges of 0.3–0.5 per cent.

DIGITAL PUSH

On November 8, 2016, demonetisation was announced. The Union government claimed it would eliminate black money, corruption, and counterfeit notes. In reality, none of these problems were resolved. At the same time, the Union government pushed the people towards digitalisation, including UPI, promising that no charges would ever be imposed. That assurance led to mass adoption; however difficult it was in the initial days.

MASSIVE GROWTH

UPI transactions grew exponentially and have been growing rapidly on a daily basis. In November 2016, in one month there were hardly 3,00,000 transactions worth ₹100 crore. In July 2026, this had grown to 2,366 crore transactions worth ₹30 lakh crore in value in a single month. This means about 79 crore transactions per day worth ₹1 lakh crore. Between August 2025 and July 2026, there were 24,000 crore transactions worth ₹330 lakh crore.

FOREIGN CORPORATE DOMINANCE

The key question is who controls these transactions? Foreign corporates dominate. US based Walmart-owned PhonePe handles 50%, US based Google Pay handles 33 per cent. Together, these two foreign corporations control 83% of UPI transactions. On the other hand, public sector bank apps like SBI Pay, PNB Pay, and Baroda M Pay barely exist in the market. Collectively, all public sector apps account for less than 1% both in number and volume. This is the design of the Modi government which is determined to develop digital payments only through foreign corporates.

RBI’S FAILURE TO CHECK MONOPOLY

Complaints were raised before the Reserve Bank of India about monopoly control of UPI transactions by two foreign companies. In November 2020, RBI through NPCI issued a guideline that no single company should exceed 30% of UPI transactions. But in practice, PhonePe and Google Pay continue to violate this guideline. RBI has not taken any action to restrict this monopoly; instead, it has deferred enforcement of this guideline repeatedly, now to January 2027. This exposes the utter failure of RBI to check the monopoly of foreign corporates in UPI service and reflects the BJP government’s servile attitude to US imperialism.

₹1.2 LAKH CRORE FEE LOOT

Currently, monthly UPI transactions are worth ₹30 lakh crore. About 65 per cent of these transactions in volume (₹20 lakh crore) are above ₹2,000, as per an estimate. At 0.5 per cent MDR, the UPI charges would work out to ₹10,000 crore per month, and ₹1.2 lakh crore annually. Even at 0.3 per cent, it would be ₹6,000 crore per month, and ₹72,000 crore annually. The main beneficiaries would be PhonePe and Google Pay, which control 83 per cent of the total volume of UPI transactions.

MODI GOVERNMENT’S POLICY

In FY2025–26, State Bank of India customers alone accounted for 20 per cent of UPI transactions both in number and volume. But SBI’s own app, SBI Pay, contributed hardly 0.5 per cent. An overwhelming majority of SBI customers use PhonePe or Google Pay. Thus, despite nationalist rhetoric, the Modi government’s policy has effectively promoted US based foreign corporates, presumably under US pressure.

COULD THEY REDUCE CASH CIRCULATION?

One stated goal of demonetisation and digital push was to reduce cash circulation. In November 2016, ₹18 lakh crore was in circulation, of which ₹15.5 lakh crore was demonetised. By January 2017, the total money circulation was pegged at ₹9 lakh crore after remonetisation of ₹6.5 lakh crore. It was claimed by the rulers that it was ideal to keep money circulation at that level comparing many advanced capitalist countries.  But today, cash circulation has crossed ₹42 lakh crore. A major reason for this is rampant corruption and black money. A large amount of cash is hoarded and not returned for circulation.

Another reason that contributes to the increased money circulation to a certain extent is the poor digital adoption due to lack of electricity, internet and insufficient telecommunication towers in many rural and hilly areas. This again clearly exposes the increased economic divide among the people. The Modi Government, which has failed in many aspects, has failed in curtailing money circulation also.

WITHDRAW THE FEE LOOT

The Modi government, in order to benefit the corporates—especially foreign ones, has amended the law to impose charges on UPI. There is a clear move on the part of the Union Government to loot thousands of crores of rupees from the ordinary people through this amendment. The government must withdraw this amendment immediately, or the people will force it to.