Why this thread exists
UPI has been free for merchants to accept since MDR was zeroed out in 2020, and every D2C brand's checkout economics assume that stays true. It went from a live debate to a passed bill in 48 hours, and now the government has drawn its first line: no consumer charge, no P2P charge, but a merchant MDR above an unspecified threshold is still coming. Tracked stage by stage, because when this actually lands, it changes what accepting UPI costs every brand using it.
4 Aug 2026
The bill gets introduced
The Centre introduces the Taxation and Other Laws (Amendment) Bill, 2026 in the Lok Sabha, amending the Payment and Settlement Systems Act, 2007 to give government flexibility to levy MDR on UPI.
Read the full signal →5 Aug 2026
RBI pushes back on timing, not direction
RBI Governor Sanjay Malhotra calls MDR talks "very premature," while acknowledging the costs of UPI infrastructure "have to be paid by someone."
Read the full signal →6 Aug 2026
Passes the harder legislative hurdle
The Lok Sabha passes the amendment bill, one day after the RBI governor's caution, clearing the path to levy MDR on UPI. It now moves to the Rajya Sabha.
Read the full signal →8 Aug 2026
Draws its first line
The Finance Ministry clarifies that consumers won't be charged for UPI payments and P2P stays free; any MDR would apply only to merchant transactions above a specified threshold, at a nominal rate.
Read the full signal →10 Aug 2026
Clears the final legislative hurdle
The Rajya Sabha passes the Taxation and Other Laws (Amendment) Bill, 2026 by voice vote. FM Nirmala Sitharaman reiterates in the House that no MDR framework has been finalised yet, and that NPCI's UPI and Service Operations Committee will deliberate on it next.
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