Fintech Brief — August 04, 2026

Government Opens the Door to UPI Merchant Charges via Payments Act Amendment

The Union government has proposed amending Section 10A of the Payment and Settlement Systems Act, 2007 — the clause that currently imposes a blanket ban on charging fees for UPI transactions. The amendment, clubbed under the Taxation And Other Laws (Amendment) Bill, 2026, would replace the universal prohibition with a narrower exemption: only government-notified online payment modes would be MDR-free. Everything else — including UPI for large merchants — could attract a Merchant Discount Rate.

The proposed change shifts the power to designate “fee-protected” payment modes from the RBI to the Centre, which industry sources see as an early step toward levying MDR on specific UPI use-cases. Consumer-facing P2P transfers would likely remain zero-fee, but merchant payments above a threshold could see charges. This comes as UPI processed a record 23.66 billion transactions worth ₹29.88 lakh crore in July 2026 alone.

The move has reignited the long-standing debate between fintech firms (who argue they need revenue sustainability to keep investing in infrastructure, cybersecurity, and global expansion) and merchant/consumer groups (who warn that any MDR could reverse adoption gains, particularly among small merchants). Industry estimates suggest nearly 75% of users might reduce UPI usage if fees are introduced.

Sources: Inc42, Business Standard, Mint

RBI Revises Deposit Rules for Transparency; MPC Meeting Underway

The Reserve Bank of India issued revised deposit direction norms on Friday (August 1), aimed at enhancing transparency and uniformity across deposit products offered by commercial banks, small finance banks, and cooperative banks. The new rules take effect from October 1, 2026.

Separately, the RBI’s Monetary Policy Committee (MPC) began its August 3–5 meeting on Sunday. Expectations are firmly for a status quo on the repo rate, with personal loans having driven 63% of the ₹5.66 lakh crore Q1 FY27 credit growth. The rupee climbed to a near one-month high on the back of strong foreign inflows and a decline in oil prices. The rate decision is due on Wednesday.

Source: Economic Times

SEBI Extends PaRRVA Enrollment Deadline to September 3

Markets regulator SEBI has extended the deadline for investment advisers and research analysts to enrol with the Past Risk and Return Verification Agency (PaRRVA) by a month — from August 3 to September 3, 2026. The extension follows representations from industry participants and PaRRVA itself, which sought more time for a smooth rollout of the performance data verification framework.

PaRRVA became operational on May 4, 2026, and is designed to verify and standardise the historical performance claims made by investment advisers and research analysts — a significant consumer-protection move in India’s growing wealth management and advisory space.

Source: Economic Times

NPCI Issues Urgent Digital Safety Alert; Banks Propose UPI Confirmation Step

NPCI issued an urgent digital safety alert urging users to report suspicious text messages through the 1930 hotline and the Sanchar Saathi portal (sancharsaathi.gov.in), as text message scams targeting digital payment users continue to rise.

Meanwhile, Indian banks have collectively proposed a “Yes/No” confirmation alert for risky UPI payments — particularly for online merchant transactions, food delivery, travel bookings, and e-commerce. The prompt would add an explicit approval step before funds are debited, targeting the surge in digital fraud cases (from 2.6 lakh in 2021 to 28 lakh in 2025, with value involved jumping from ₹551 crore to ₹22,931 crore). NPCI has reportedly expressed reservations about a lagged credit system, arguing India should not simply copy payment friction models from other countries given how accustomed users are to instant transactions.

In a related development, GlobalPay (WSFx Global Pay Limited) disclosed that the RBI has expanded its Authorised Dealer Category-II licence under FEMA 2026, making it one of the first non-bank fintech platforms to process trade-linked international remittances of up to ₹25 lakh per transaction — previously the exclusive domain of banks.

Sources: FF News, Outlook Business, TechTimes