The Lok Sabha has passed a Bill to amend the Payment and Settlement Systems Act, allowing for charges on digital payment services through UPI and other notified electronic payment modes. The amendment seeks to remove the existing legal provision that prevents banks and payment service providers from charging Merchant Discount Rate (MDR) on such transactions.
The Indian parliament's lower house, the Lok Sabha, has approved a Bill aimed at amending the Payment and Settlement Systems Act, 2007. This legislation empowers the government to authorise banks and service providers to levy charges on payments executed through the Unified Payments Interface (UPI) and other designated electronic payment systems. The move is intended to institute a fee structure for digital payment services that caters to both consumers and small businesses, while sustaining a viable revenue model for banks, payment service providers (PSPs), and payment infrastructure companies that facilitate the digital payments ecosystem.
The amendment passed by the House seeks to remove the existing legal provision that prevents banks and payment service providers from charging Merchant Discount Rate (MDR) on notified electronic payment modes. While real-time payments made through RTGS and NEFT already attract service charges, UPI transactions have so far remained exempt from such fees.
The proposed changes in the Payment and Settlement Systems Act are a part of comprehensive legislation on taxation, which was introduced in the House on Tuesday. The Bill was passed through a voice vote in the Lok Sabha after the House resumed at 2 pm after the earlier adjournment.
Source:
Akashvani News
