Government to Review Merchant Discount Rate After Bill Passage

The Finance Ministry announced that, following the passage of the Taxation and Other Laws Amendment Bill, 2026, the NPCI and its UPI Operations Committee will assess the need for a merchant discount rate (MDR). While the amendment does not impose any charge on consumers, the government is considering a limited MDR for merchants whose transaction volume exceeds a prescribed threshold. Any such fee would be set at a modest level, considerably lower than the rates applicable to debit or credit card transactions. This approach aims to protect small traders and everyday consumers from additional costs while allowing a controlled revenue model for high‑volume merchants.