Now Reading: UPI MDR May Return Under Proposed Payment Law Amendment
-
01
UPI MDR May Return Under Proposed Payment Law Amendment
The government has proposed amending the Payment and Settlement Systems Act, 2007, to remove the existing legal ban on charges for certain electronic payments. The Bill, tabled in the Lok Sabha, does…
The Story in Brief
The government has proposed amending the Payment and Settlement Systems Act, 2007, to remove the existing legal ban on charges for certain electronic payments. The Bill, tabled in the Lok Sabha, does not immediately reintroduce merchant discount rate (MDR) on UPI. If Parliament passes it, the government and RBI could later notify which payment modes remain free and whether selected merchants must pay MDR.
MDR is currently zero on UPI, leaving banks and payment firms to bear infrastructure, cybersecurity and fraud-prevention costs. UPI processed a record 23.66 billion transactions worth Rs 29.88 trillion in July 2026. Industry participants expect any future levy to target large merchants, commerce-related payments or transactions above a set value, rather than ordinary users.
The Indian Opinion
Claims that the Bill means UPI payments will suddenly become costly are premature. So is the opposite claim that the amendment changes nothing. It creates room for a later policy decision, while the present zero-charge system remains in place. The sensible test is the government notification that follows, especially whether it protects small merchants and person-to-person payments. Until then, consumers should not be asked to pay MDR.
Source: livemint.com
This story was synthesised by AI from the source linked above.
