New Delhi, Aug. 9 -- The Unified Payments Interface (UPI) is one of India's most successful pieces of economic infrastructure. In July, it handled nearly 24 billion transactions worth almost Rs.30 trillion. That scale and ubiquity make UPI more than a convenient payments product. It is an essential part of India's digital public infrastructure (DPI).

Hence, the legislative change opening the door to a merchant discount rate, or MDR, deserves scrutiny. The amendment does not itself impose an MDR. But it removes the protection that had kept MDR at zero for UPI and RuPay payments, leaving future charges to executive decisions.

The finance minister has assured the country that any MDR would apply only to merchants and not consumers. It was ...