Lok Sabha Approves Bill Allowing UPI Transaction Charges
Lok Sabha Approves Bill Allowing UPI Transaction Charges
IN · Published Aug 8, 2026
The Lok Sabha has passed a bill amending the Payment and Settlement Systems Act, 2007, which authorizes the government to permit banks and service providers to levy charges on Unified Payments Interface (UPI) transactions and other electronic payment modes.
The bill aims to establish a sustainable revenue model for banks and payment service providers by removing the existing prohibition on charging Merchant Discount Rate (MDR) for certain electronic payments.

Impact & Risks

The amendment could impact consumers and small businesses by introducing additional costs for UPI transactions, which have so far been free. While the government aims to create a sustainable revenue model for banks and payment service providers, there is a risk that the charges could discourage the use of digital payment methods, potentially slowing down the adoption of cashless transactions in India.

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