UPI Hits 24,162 Cr Transactions Worth ₹314 Lakh Cr in FY26, Reinforcing Digital India

UPI@10 Years: 86% of Digital Transactions, Government Allows Merchant Fees Under PSS Act Amendment

UPI completes 10 years with 86% of India's digital transactions, but the zero-MDR model is ending. The government has amended the PSS Act to allow merchant fees, aiming to fund the next growth phase in rural areas and cross-border payments. Key challenge: balancing inclusion with sustainability.

Govt Proposes 0.25-0.5% MDR on UPI Transactions Above ₹2,000 via PSS Act Amendment

The government has proposed allowing a Merchant Discount Rate (MDR) of 0.25-0.5% on UPI transactions above ₹2,000 via an amendment to Section 10A of the Payment and Settlement Systems Act, 2007. This reverses a decade-long zero-MDR policy, potentially undermining financial inclusion, formalisation, and investment in UPI infrastructure. While only 5% of transactions by volume are affected, they account for 65% of transaction value, making this a significant policy shift.

Taxation Bill 2026 Allows MDR on UPI & RuPay; 23.6 Bn UPI Transactions in July

The Taxation and Other Laws (Amendment) Bill, 2026, passed in Lok Sabha, paves the way for reintroducing MDR on UPI and RuPay debit card transactions. This shifts India's digital payments policy from zero-MDR to a sustainable fee model, impacting 23.6 billion monthly UPI transactions and the largely duopolistic market of PhonePe and Google Pay.

UPI Completes 10 Years: 66 Cr Daily Transactions, 49% Global Volume, Challenges of Monetisation & Next Frontiers

UPI's 10th anniversary highlights its dominance in global real-time payment volume (49%) but not in value, as low-value retail payments dominate. The key challenges ahead are monetisation of the zero-MDR model, expanding into high-value transactions, and integrating with tax compliance to drive digital economy growth.

RBI Introduces 0.4% MDR on UPI Transactions Above ₹2,000 for Merchants from Oct 15, 2026

Ending nearly six years of zero-MDR UPI, the government introduces a 0.4% fee on merchant transactions above ₹2,000 from October 15, 2026. This shift aims to ensure long-term sustainability of India's digital payments ecosystem. Importantly, all person-to-person (P2P) and small merchant payments (below ₹2,000) remain free for users.

NPCI Imposes 0.4% MDR on UPI P2M Transactions Above Rs 2,000 from Oct 15, 2026

UPI transactions above Rs 2,000 will now attract a 0.4% Merchant Discount Rate (MDR, capped at Rs 300) from October 15, 2026, for person-to-merchant (P2M) payments. This reverses the zero-MDR policy adopted in 2020, aiming to make the UPI ecosystem financially sustainable. Over 95% of transactions remain unaffected, and critical services like rail tickets and utility bills have a flat Rs 5 fee.

Taxation and Other Laws (Amendment) Bill 2026 Allows MDR on UPI: Subsidy Falls to ₹2,000 Cr in FY27

UPI, currently free for users, may become chargeable after the government introduced the Taxation and Other Laws (Amendment) Bill, 2026. The Bill allows the government to notify transactions that can attract Merchant Discount Rate (MDR), potentially ending the zero-MDR regime. For students, this is a key economy/polity topic linking digital payments, financial inclusion, and fiscal policy.

Govt Considers MDR on UPI as Cash Growth Quickens to 13% While UPI Growth Slows to 18.7%

The government, via the Taxation and Other Laws (Amendment) Bill 2026, is enabling MDR on UPI/RuPay debit card transactions. Latest RBI data shows cash with public growth accelerating to 13% while UPI value growth decelerates to 18.7% - narrowing the gap. Experts flag potential inflation undercounting and economic stress, making this a key topic for exam understanding of digital payment dynamics and cash economy.