Lok Sabha Passes Bill Allowing Fees on UPI and Other Electronic Payments

Why in news

The Lok Sabha passed the Taxation and Other Laws (Amendment) Bill, 2026, authorizing banks and service providers to levy fees on UPI and electronic payments.

Background

The bill was passed on August 6, 2026, by the Lok Sabha. It specifically aims to permit Merchant Discount Rate (MDR) charges to create a sustainable revenue model for payment infrastructure firms.

Facts for Prelims

• Act / BillTaxation and Other Laws (Amendment) Bill, 2026
• FactThe bill allows for the imposition of Merchant Discount Rate (MDR) charges on UPI and electronic payments.
• BodyThe Lok Sabha is the lower house of the Parliament of India.

For Mains

Q. Discuss the implications of introducing Merchant Discount Rate (MDR) charges on UPI and electronic payments on financial inclusion and the digital economy in India.

Dimensions to cover in your answer

• impact on small merchants
• sustainability of payment infrastructure
• potential for increased transaction costs for consumers

Keywords: financial inclusion · MDR charges · digital infrastructure · sustainable revenue model · transactional costs

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