India's UPI Ecosystem Faces Changes with Taxation Bill, 2026
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Insights by Echo AI
The Taxation and Other Laws (Amendment) Bill, 2026 has been passed by the Lok Sabha, removing the statutory prohibition on levying Merchant Discount Rate (MDR) on UPI payments. This bill changes the economics of India's UPI ecosystem, raising questions about future MDR charges and their impact on small businesses and low-value digital payments. Experts suggest that any future MDR should be low, transparent, and targeted at large merchants with safeguards for small businesses and ordinary users to preserve digital payments adoption.
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