UPI's Free Ride Is Over: New MDR Rules Loom as Parliament Clears Enabling Bill

Parliament cleared the Taxation and Other Laws (Amendment) Bill, 2026 on Monday, a move that fundamentally alters the future of India's digital payments landscape. While Finance Minister Nirmala Sitharaman reassured a anxious Rajya Sabha that peer-to-peer UPI payments will remain free, the bill strips away the blanket ban on merchant discount rates (MDR), empowering the government to impose fees on certain electronic payment transactions.

Who Wins, Who Loses

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