Government considers reintroducing MDR on UPI via amendment bill
Business
The government is thinking about bringing back the merchant discount rate (MDR) for UPI payments (that's a fee shops pay to banks and payment apps when you pay digitally).
It's doing this through the Taxation and Other Laws (Amendment) Bill, 2026, aiming to keep UPI running smoothly without making regular users pay extra.
Zero-fee UPI model limits investment
UPI's zero-fee setup has made it tough for banks and payment providers to invest in better tech and security.
Even though the government covered some MDR costs, it barely scratched the surface, only 11% of expenses were paid.
With UPI handling a massive 241.6 billion transactions worth ₹314.2 lakh crore in fiscal 2026 (up 30% from last year), officials say it's time for a more sustainable model.