Government moves toward restoring merchant discount rates on UPI payments

Parliamentary amendments are moving forward to restore merchant discount rates (MDR) on UPI payments. The measure seeks to boost digital transaction adoption by enabling banks to levy charges on person-to-merchant payments. The Reserve Bank of India will determine the specific fee structure for these transactions.

The development comes as payment platforms have struggled to establish profitable business models. Allowing charges on UPI transactions is expected to generate significant revenue for payment operators and banks engaged in digital payments infrastructure.