India, Aug. 7 -- The Lok Sabha on Thursday passed a Bill to amend the Payment and Settlement Systems Act, 2007. If passed by the Upper House and accepted by the President, the law will allow the government to permit banks and payment companies to charge fees on UPI and other digital payments in the future.

The Bill removes the existing rule that stops banks and payment service providers from charging a Merchant Discount Rate (MDR) on UPI transactions. That said, the Bill does not mean that UPI users will start paying charges immediately.

MDR is a small fee paid by merchants to banks and payment companies every time a customer makes a digital payment. For example, when a customer pays a shopkeeper through a digital payment system, the me...