Spending over Rs 2,000 on UPI? Now you might have to pay a fee
The article discusses the potential introduction of Merchant Discount Rate (MDR) on UPI and RuPay debit card transactions, specifically for payments exceeding Rs 2,000 and for large merchants. This move, proposed through the Taxation and Other Laws (Amendment) Bill, 2026, aims to help banks and payment system providers recover the substantial costs (estimated up to Rs 20,000 crore annually) of maintaining the digital payment infrastructure, which are currently largely subsidized by the government or borne by financial institutions. The majority of low-value UPI transactions are expected to remain free.
The article discusses the potential introduction of Merchant Discount Rate (MDR) on UPI and RuPay debit card transactions, specifically for payments exceeding Rs 2,000 and for large merchants. This move, proposed through the Taxation and Other Laws (Amendment) Bill, 2026, aims to help banks and payment system providers recover the substantial costs (estimated up to Rs 20,000 crore annually) of maintaining the digital payment infrastructure, which are currently largely subsidized by the government or borne by financial institutions. The majority of low-value UPI transactions are expected to remain free.
Exam linkage
GS Paper 3: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. Government Budgeting. Specifically, it relates to the financial sector, digital infrastructure, and government policy concerning the economy.
Syllabus mapping
This topic appears in Mains
Questions on Indian Economy come up regularly in GS papers. Practice writing an answer — and see exactly what earns marks.
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