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TECHNOLOGY

India Plans to Introduce Business Model for Instant Payments Network

New legislation aims to potentially alter the zero-merchant-discount-rate regime for UPI payments.

4 August 2026 · 14:32 · 1 sources

On August 4, 2026, India introduced legislation to establish a business model for its instant payments network, Unified Payments Interface (UPI). The move sets the stage for a possible overhaul of the zero-merchant-discount-rate (MDR) policy, which since 2020 has allowed businesses to accept UPI payments without incurring fees. This change could impact how merchants are charged for digital transactions in India.

Sources

Technorunch — India moves to give its instant payments network a business model

THE QUESTIONS THIS EVENT LEAVES BEHIND

What are the potential implications for small businesses if merchant discount rates are introduced for UPI payments?

How might changing the zero-MDR regime affect consumer adoption of UPI transactions?

What incentives does the government have to overhaul the current zero-MDR policy?

How will the new business model be structured to balance stakeholder interests?

What alternate funding mechanisms could support the UPI network if merchant fees are introduced?

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