Lok Sabha Passes Bill Paving Way for UPI Charges:Â Today, on August 6, the Lok Sabha has approved an amendment that could give the government the power to levy fees on selected transactions utilising UPI and other types of electronic payment in the times to come. The Bill does not impose any charges immediately. Instead, it empowers the Central Government to determine which payments may stay free and which ones will entail a Merchant Discount Rate (MDR) via further announcements.
Lok Sabha Passes Bill Paving Way for UPI Charges:Â What has changed under the new Bill?
The bill modifies the Payment and Settlement Systems Act of 2007. The law did not allow banks and payment service companies to levy the merchant discount on specified digital payment modes, including UPI and RuPay debit cards. Through the amendment, the authority has now been empowered to determine through notifications which payment methods would continue to have zero charges. Therefore, the Bill itself does not announce any fee or timeline for introducing charges.
Will UPI users have to pay charges immediately?
Well, the answer is No. There is no immediate change for people using UPI. The Bill only creates a legal framework that allows the government to introduce charges in the future if it chooses to do so. Any decision on MDR, including where it will apply and at what rate, will require a separate government notification. As of now, UPI transactions continue under the existing system.
How could merchants and banks be affected?
If the government decides to introduce MDR in the future, merchants may have to pay a small fee to banks and payment service providers for processing certain digital transactions. Banks and fintech companies have long argued that maintaining UPI infrastructure involves high costs and that a sustainable revenue model is needed to support innovation, cybersecurity and network expansion. The exact impact will depend on the government’s future policy decisions.
Lok Sabha Passes Bill Paving Way for UPI Charges:Â What happens next?
Although the Bill indicates a significant change in policy, it does not imply that UPI will automatically become chargeable. The government will now have the ability to implement changes to certain payment methods and exempt some methods from MDR. Nevertheless, until the announcement is made, merchants and consumers should not assume that UPI payments will incur charges in the near future. Hence, further clarity will have to be provided by the government for the implementation of the new policy.
Disclaimer: This article is for informational purposes only and is based on publicly available reports. The Bill does not impose UPI charges immediately. Any future charges, if introduced, will depend on official government notifications and applicable regulations.
