Finance Ministry Moves to Enable MDR on UPI

The Union Finance Ministry proposed amendments to the Payment and Settlement Systems Act to allow merchant discount rates on UPI and scrap the zero-MDR provision. Aimed at funding UPI's next growth phase, the move would not charge consumers directly, with the burden falling on merchants. Industry bodies have long pushed for MDR, citing sustainability concerns as UPI handles 88% of digital transactions. The bill awaits parliamentary approval.