Bill Introduced to Enable MDR on UPI Payments

# Bill Introduced to Enable MDR on UPI Payments ### Why in News? The Finance Ministry introduced a Bill to amend the **Payment and Settlement Systems Act, 2007**, allowing **Merchant Discount Rate** (**MDR**) to be levied on specified **UPI** and other digital-payment transactions. ### What is MDR? - **Merchant Discount Rate** is the fee paid by a merchant to banks or payment providers for processing a digital transaction. - **UPI** has operated with zero **MDR** since **2020**; the proposal would allow charges for specified transactions, with the source indicating a focus on larger merchants while small businesses remain exempt. - The policy debate is about balancing low-cost digital payments with a sustainable revenue model for payment infrastructure. ### Exam Connect - **UPI** → operated by **NPCI** under **RBI** oversight - **Payment and Settlement Systems Act, 2007** → legal framework for payment systems - **RBI** → designated authority for payment-system regulation