Merchant discount rate on UPI: Will customers pay, who bears operating costs, why now, and other top FAQs answered

The Lok Sabha on 6 August passed the Taxation and Other Laws (Amendment) Bill, 2026, which amends the Payment and Settlement Systems Act, 2007 and allows the government to bring back merchant discount rate (MDR) charges on transactions conducted through the unified payments interface (UPI) system.

The lower house of Parliament on Thursday, approved the legislation that seeks to “fund UPI’s next phase of growth”.