FM Nirmala Sitharaman introduced the Bill in the Lok Sabha, proposing to remove a legal provision that bars banks and payment service providers from levying MDR on specified electronic payment modes.
Also Read: India paves way for return of merchant fees on digital payments
MDR is the fee a bank charges a merchant for accepting digital payments through UPI, credit cards and debit cards. The government scrapped MDR on UPI transactions in January 2020 to encourage digital payments.
Brokerage Jefferies said the amendments would empower the Reserve Bank of India (RBI) to determine MDR on UPI transactions, paving the way for charges on person-to-merchant (P2M) payments above ₹2,000.
Paytm and Pine Labs, Jefferies said. It estimates the move could generate a ₹ 5,000-10,000 crore revenue pool for the payments ecosystem by FY28.
Also Read: Payment Bill rekindles MDR hopes for large-value UPI
The move comes as UPI companies struggle to build profitable payments businesses despite the platform's rapid growth.