Finance Ministry moves to enable MDR on UPI — Here’s what scrapping zero MDR provision means for UPI users

The Union Ministry of Finance has today proposed amendments to the Payment and Settlement Systems Act, 2007, which could in effect bring back merchant discount rates (MDR) on transactions done through the unified payments interface (UPI). Aimed at “funding UPI’s next phase of growth”.

The amendments would allow the ministry to enable MDR on UPI and propose scrapping of the zero MDR provision under Section 10A, which bars banks and payments system providers (PSPs) from imposing charges on online payments.