The Centre has changed the legal framework for charges applicable to digital payments, paving the way for a new Merchant Discount Rate (MDR) structure for select UPI transactions from October 15. Under the revised framework, UPI payments up to Rs 2,000 will continue to attract zero MDR, while charges will apply to certain higher-value merchant payments. The Government of India amended the Payment and Settlement Systems (PSS) Act, 2007, allowing it to specify electronic payment modes and transaction categories where charges cannot be imposed. The move is aimed at providing greater clarity and transparency around digital payment costs.
