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Lok Sabha passes bill paving way for UPI charges: What the new law means for users, merchants and banks

The Lok Sabha on Thursday passed a key amendment to the Payment and Settlement Systems Act, 2007, empowering the Central government to allow banks and payment service providers to levy charges on Unified Payments Interface (UPI) transactions and other notified digital payment modes. While the amendment does not immediately impose charges, it removes the legal barrier that prevented banks from collecting Merchant Discount Rate (MDR) on such transactions.