New Delhi, Aug. 4 -- The government on Monday proposed a bill to amend the Payment and Settlement Systems (PSS) Act, 2007 that could eventually allow merchant discount rate (MDR) to be charged on some UPI transactions.

The amendment bill was tabled in the Lok Sabha on Tuesday. However, even if passed by parliament, it will not change anything for consumers or merchants immediately. It is only an enabling provision that allows the Reserve Bank of India (RBI) to change rules and permit the levy of MDR on merchants. The government removed MDR in January 2020 to accelerate the adoption of digital payments across the country.

Mint explains the government's proposal, whether MDR could return on UPI, and its impact on consumers.

Merchant disc...