Finance Ministry Moves to Enable MDR Fees on UPI Transactions

The Finance Ministry is preparing to introduce the Taxation and Other Laws (Amendment) Bill, which effectively ends the zero-MDR provision for UPI transactions.

This policy shift allows banks to charge Merchant Discount Rates (MDR) on large-ticket UPI payments, aiming to improve the financial viability of digital payment infrastructure.

While small retail transactions remain exempt, the move is expected to impact large merchants who will now face transaction fees for processing high-value digital payments.