India moves to give its instant payments network a business model

India is taking steps to reshape the business model behind its Unified Payments Interface (UPI), a widely used payments network built by the government, via new legislation that could pave the way for merchants to pay charges on some UPI transactions.

The legislation lays the legal groundwork for a potential overhaul of India’s zero-merchant-discount-rate (MDR) regime, under which businesses have not paid fees to accept UPI payments since 2020.

The policy shift comes as UPI has become ubiquitous in India, processing a record 23.66 billion transactions worth ₹29.88 trillion (around $313.4 billion) in July alone, per the National Payments Corporation of India (NPCI), the operator of UPI.