DPI Brief — August 06, 2026
Government Moves to Legalise Merchant Fees on High-Value UPI Transactions [L2 — Payments]
The Union government tabled the Taxation and Other Laws (Amendment) Bill, 2026 in Parliament on August 5, proposing amendments to the Payment and Settlement Systems Act that would remove UPI’s blanket statutory exemption from the Merchant Discount Rate (MDR). The Bill itself does not impose charges — it creates the legal framework that would allow the government to notify MDR on specific digital payment modes in the future.
According to a Reuters report, options under consideration include a 0.25–0.5% levy on UPI transactions above ₹2,000, applicable only to merchants with annual turnover exceeding ₹1.5 crore. NPCI had earlier recommended an interchange fee of up to 1.1% on merchant PPI transactions above ₹2,000. Analysts at Bernstein estimate the most likely outcome is a merchant-funded MDR of 30–40 basis points, with consumers remaining unaffected. Jefferies projects this could generate a ₹5,000–10,000 crore annual revenue pool for the payments industry, benefiting companies like Paytm and Pine Labs.
Transactions above ₹2,000 account for roughly 4% of UPI volume but nearly 70% of transaction value — making them the practical starting point for monetisation. The Bill requires parliamentary approval before any charges take effect.
Sources: The Federal, The Tribune, Economic Times
UPI Smashes All-Time Record: 23.66 Billion Transactions in July [L2 — Payments]
NPCI’s July 2026 data confirms UPI processed 23.66 billion transactions worth ₹29.88 lakh crore — its highest-ever monthly performance. Volume grew 22% year-on-year, while value surged 19%. The milestone was driven by the continued expansion of UPI 123Pay for feature-phone users, cross-border UPI linkages (now live in 10 international markets), and deeper merchant penetration.
The record comes at a pivotal moment: the same data is being cited by policymakers to argue that UPI’s scale now supports a sustainable monetisation framework — precisely the logic underpinning the MDR amendment Bill discussed above.
Sources: StartupTalky, NextGenGPost
Aadhaar e-KYC Deadline Looms for LPG Consumers [L1 — Identity]
Oil marketing companies (IOCL, HPCL, BPCL) have intensified warnings to domestic LPG consumers — particularly those under the Pradhan Mantri Ujjwala Yojana (PMUY) — to complete Aadhaar-based e-KYC verification by August 15–16, 2026. Failure to comply will make consumers ineligible for subsidised cylinders until verification is completed, effectively forcing them to pay non-subsidised rates.
The mandate, effective since March 16, 2026, requires biometric authentication. Consumers can complete e-KYC through the IndianOil ONE app, at their distributor, or via delivery personnel. OMCs are running awareness campaigns and setting up e-KYC camps — Aligarh Muslim University’s gas agency, for instance, organised a camp on August 5.
This push underscores the deepening integration of Aadhaar-based identity verification into essential government service delivery, expanding beyond banking into energy subsidies.
Sources: Goodreturns
Protean eGov Scales DPI Infrastructure; CKYC 2.0 and Aadhaar Seva Kendras Drive Growth [L1/L2 — Identity & Payments]
Protean eGov Technologies (formerly NSDL e-Gov) reported Q1 FY27 consolidated revenue of ₹251 crore, up 19% year-on-year, though EBITDA fell 24.8% to ₹12 crore due to margin pressures from infrastructure scaling. The company is a critical DPI backbone operator, managing systems for NPS, APY, Aadhaar authentication, and the Central KYC Registry.
Key highlights: the New Initiatives vertical surged 276% YoY to ₹42 crore (now 17% of total revenue), driven by CKYC 2.0 data remediation, Agristack development, and Bima Sugam integration. Protean has operationalised 102 Aadhaar Seva Kendras across 25 states as of July 2026, creating a recurring physical infrastructure channel for identity services. CKYC 2.0 rollout is expected to begin from August 2026, enabling reusable KYC across financial institutions via a 14-digit CKYC number.
Sources: Economic Times, Zigram
ONDC Crosses 200 Million Transactions; Doubling in Six Months [L4 — Commerce]
The Open Network for Digital Commerce (ONDC) has crossed 200 million cumulative transactions, with the second 100 million achieved in just six months — half the time taken for the first 100 million. Government sources highlighted ONDC’s expanding reach from Banarasi weavers to bamboo artisans in Nagaland, signalling deeper rural and artisanal seller onboarding.
The network’s acceleration is being bolstered by government schemes including PMEGP, PM Vishwakarma, and ONDC-specific seller onboarding incentives targeting MSMEs. GeM (Government e-Marketplace) procurement also continues to scale — GAIL reported ₹2,697 crore in GeM procurement in FY 2025-26 (38.75% of total procurement), while NHPC achieved 97.85% of total annual procurement through GeM.
Published by DPI Watch — tracking India’s Digital Public Infrastructure across all seven layers.