UPI MDR: Surjewala says govt should have charged foreign players $50-100 million annual fee

UPI is set to undergo a significant change from October 15, with MDR being introduced on select high-value merchant transactions. The move has sparked debate over the funding of India’s digital payments ecosystem, with Congress leader Randeep Surjewala suggesting an annual participation fee for dominant foreign players instead.

Surjewala argued that the government could instead have imposed an annual participation fee of $50 million to $100 million on dominant foreign players benefiting from UPI. He also questioned the commercial value of transaction data generated through UPI, citing spending behaviour of millions of Indians.

“The Indian Govt has given technological access to American companies, and they are receiving massive volumes of data on the spending behaviour of millions of Indians. This data is itself a goldmine,” Congress leader Randeep Singh Surjewala said in an X post.

“This data is itself a goldmine, but the Modi Govt has never thought of imposing an ‘Annual Participation Fee’ on every dominant foreign player benefiting from UPI. Instead of paying the money for processing UPI transactions, a participation fee of USD 50 to 100 million could have been imposed.”

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The remarks came as Surjewala questioned the growing role of foreign-owned payment platforms in India’s UPI ecosystem. In his X post, he specifically referred to PhonePe and Google Pay and claimed that the two platforms account for around 80% of UPI transactions.

“80% of UPI transactions are processed through two American companies, ‘PhonePe’ & ‘GooglePay’. This means that Rs. 320 Lakh Crore of UPI business out of a total of 400 lakh crore will be processed by two American companies.”

Surjewala further claimed that these companies could receive a share of what he described as UPI transaction-related revenue under the latest changes to the payment system.

“This also means that they will get a share in the pie of the Rs. 5040 Crore UPI transaction tax for the first time, which was earlier completely free.”

He also highlighted PhonePe’s position in the UPI market, stating that the Walmart-owned company alone handles a substantial share of transactions.

“PhonePe, owned by Walmart, alone processes 45% of UPI transactions. PhonePe had paused their Indian IPO in March 2026 after its valuation fell below $10 billion.”

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Surjewala argued that the financial implications could extend beyond transaction processing, particularly if payment platforms begin generating revenue from UPI transactions.

“Once it starts making money on the UPI transactions processed by it, the valuation will automatically go up.”

The Congress leader also raised concerns over the economic value of transaction data generated through digital payments, arguing that spending patterns of millions of Indians could have significant commercial value.