DPI Brief — August 19, 2026

President Assent Opens Door for UPI MDR Charges ¹

President Droupadi Murmu gave assent on August 17 to the Payment and Settlement Systems (Amendment) Act, 2026, fundamentally altering the legal framework around zero-MDR on UPI and RuPay. The amendment gives the government power to notify which electronic payment modes or transaction categories will remain exempt from Merchant Discount Rate charges — and, by implication, which won’t.

Finance Minister Nirmala Sitharaman has stated UPI payments will remain free for consumers, and any future MDR would apply only to select merchant categories. The UPI and Services Steering Committee led by NPCI will now decide the specifics. This is the most significant structural change to India’s payments pricing since UPI’s zero-MDR mandate was introduced in 2020, and it arrives alongside the Taxation and Other Laws (Amendment) Act, 2026, which extends income tax exemptions for foreign electronics contract manufacturers till 2040-41.

Layer: L2 — Payments

UIDAI Crosses 2 Crore Biometric Updates for School Children ²

UIDAI’s mission-mode Mandatory Biometric Update (MBU) drive, launched in September 2025, has now completed over 2 crore biometric updates for school children across more than 1.56 lakh schools. The drive integrates with UDISE+ (Unified District Information System for Education Plus) to let schools track each child’s MBU status.

Aadhaar enrolment for children under five captures only demographics and a photograph; biometrics (fingerprints and iris) must be added at age 5 and updated again at 15. UIDAI has waived MBU fees for children aged 5–17 until September 30, 2026. Failure to update can block authentication for government scheme benefits and exam registrations (NEET, JEE, CUET). Separately, 100 entities have onboarded to Aadhaar-based offline verification within just three months of its rollout, signalling strong private-sector adoption.

Layer: L1 — Identity

Qatar Launches UPI-Powered Remittance Corridor via PosTransfer ³

Qatar became the eighth country to adopt UPI with the launch of PosTransfer on August 15 — a UPI-powered remittance service developed by Qatar Post, the Universal Postal Union’s Interconnection Platform, and NPCI International Payments Limited (NIPL). Indian residents in Qatar can now send funds directly to UPI-enabled bank accounts in India.

This follows the broader pattern of UPI’s international expansion: Nepal already has live P2P interoperability, and NPCI International has committed to strengthening cross-border payment connectivity between Nepal and India, enabling real-time person-to-person transfers using mobile numbers or VPAs without needing bank account details.

Layer: L2 — Payments

Razorpay Unveils Vulcan, India’s First AI Foundation Model for Payments ⁴

Fintech unicorn Razorpay launched Vulcan, a transformer-based AI foundation model trained on 3 trillion data points across 4 billion payment transactions. Built with NVIDIA and AWS and entirely hosted in India, Vulcan consolidates what were previously fragmented ML models for routing, fraud detection, risk scoring, and checkout personalisation into a single continuously-learning system.

The model uses approximately 3,000 signals per transaction. Early adopters include Blinkit, redBus, and Bachatt. CEO Harshil Mathur framed it not as a product launch but as an infrastructure shift — every payment processed improves the model for subsequent transactions. The launch comes as Razorpay pursues a confidential IPO reportedly targeting $600–700 million.

Layer: L2 — Payments (Private Sector DPI Adjacent)

NeGD Pushes DigiLocker and API Setu Adoption via State Workshops ⁵

The National e-Governance Division (NeGD) under MeitY conducted a Digital India State Awareness Workshop in Ranchi, Jharkhand, focused on driving adoption of DigiLocker, Entity Locker, MeriPehchaan, API Setu, UMANG, and myScheme among state-level departments. The workshop aimed to make government services simpler and more citizen-friendly by onboarding state departments onto these national digital platforms.

Meanwhile, GeM continues its expansion: as of August 2026, it connects over 1.37 lakh government buyer organisations with nearly 25 lakh sellers, facilitating cumulative procurement exceeding ₹20 lakh crore with over 75 lakh orders executed in FY 2025-26 alone. ONDC has crossed 7.64 lakh sellers across 616+ cities.

Layer: L3/L4 — Documents & Commerce