DPI Brief — August 20, 2026
UPI MDR Bill Gets Presidential Assent; Cash Usage Quickens
The Taxation and Other Laws (Amendment) Bill, 2026 received the President’s assent on August 18, amending the Payment and Settlement Systems Act, 2007 to legally enable a Merchant Discount Rate (MDR) on UPI and RuPay transactions. The government reiterated that UPI will remain free for consumers; any future MDR will be “nominal” and restricted to select merchant categories. The actual rates, eligibility thresholds, and revenue-sharing mechanism will be decided by the UPI and Services Steering Committee chaired by NPCI — six key questions the final framework must still settle, as Business Standard outlined.
Meanwhile, The Hindu’s analysis of RBI data reveals UPI transaction value growth has decelerated from a peak of nearly 80% year-on-year to 20.3% in FY26 and further to 18.7% in the April–August 2026 period. Cash with the public hit ₹41.8 lakh crore as of July 31 — 13% higher than the same period last year and accelerating. Whether the MDR debate itself is dampening adoption or structural friction is at play remains an open question.
Flipkart Enters Food Delivery via ONDC, Targeting August 15 Launch
Walmart-owned Flipkart is preparing to launch a food delivery pilot in Bengaluru around August 15, built entirely on the government-backed ONDC network rather than as a proprietary marketplace. The company is pitching a commission rate of around 10% to restaurants — significantly below the 16–30% typically charged by Zomato and Swiggy — per Moneycontrol. The service will be available both within the main Flipkart app and via a standalone food delivery app, led by Ashish Vijayvergiya, formerly chief of staff to Flipkart Group CEO Kalyan Krishnamurthy.
This is arguably the highest-profile commercial validation of ONDC’s commerce layer to date. Flipkart’s ONDC-integrated strategy bypasses the friction of building a proprietary merchant network from scratch, but its ultimate test will be delivery orchestration and breaking consumer stickiness to incumbents’ loyalty programs.
UIDAI Crosses 2 Crore Biometric Updates for Schoolchildren
UIDAI announced on August 18 that it has completed over 2 crore (20 million) Mandatory Biometric Updates (MBUs) for schoolchildren across 1.56 lakh schools nationwide under a special campaign. The drive links schools with Aadhaar to keep students’ biometric records current — critical for exam authentication and welfare scheme delivery. MBU services are currently free for all children aged 5–17 until September 30, 2026, per the official statement reported by IANS.
MeitY Tells Parliament: CSC Operators Cannot Store Aadhaar or Banking Data
Responding to parliamentary questions, MeitY clarified that Common Service Centre (CSC) operators are prohibited from storing Aadhaar or banking data on their systems. The government also disclosed that registration for Consent Managers under the DPDP Act is scheduled to begin from November 13, 2026 as part of Phase 2 of the rules implementation. The Data Protection Board, tasked with citizen grievance redressal, is in Phase 1 of establishment — recruitment ads for the Chairperson and four Members were published on June 6, 2026. Citizens can file data protection grievances through the CSC Helpdesk (14599) and the Digital Seva Portal, as reported by TechObserver.
TRAI Proposes QoS Amendments, Takes Action Against 1.83 Lakh Spam Resources
TRAI has invited stakeholder comments (deadline August 26) on proposed amendments to telecom and broadband Quality of Service regulations. Separately, the regulator took action against 1.83 lakh telecom resources in the April–June quarter to curb unsolicited commercial communications, blacklisting 263 senders. The renewed push comes amid growing debate about AI-led spam detection accuracy — a MediaNama roundtable highlighted that operators’ AI systems often disagree on what constitutes spam, raising false-positive concerns for legitimate businesses.
Covered layers: L1 (Identity), L2 (Payments), L4 (Commerce), L7 (Trust). Sources: PIB, Business Standard, The Hindu, Moneycontrol, IANS, TechObserver, TRAI, MediaNama.
UPI MDR Bill Receives Presidential Assent; Cash Usage Creeps Up
The Taxation and Other Laws (Amendment) Bill, 2026 received presidential assent on August 18, amending Section 10A of the Payment and Settlement Systems Act, 2007. The amendment gives the government legal backing to modify the zero-MDR framework on UPI and RuPay debit card transactions. Consumers will continue to transact free, but a nominal Merchant Discount Rate may now be levied on select merchant categories. The UPI and Services Steering Committee, headed by NPCI, will decide the specific rates and eligibility. The Bill had passed the Lok Sabha on August 6 amid opposition din.
Meanwhile, RBI data analysed by The Hindu shows UPI transaction value growth has slowed to 20.3% in FY26 and further to 18.7% in FY27 (as of August), while cash with the public rose 12% in FY26 and 13% year-on-year by July 2026. Whether the MDR debate itself is accelerating the cash rebound is an open question the government will need to watch.
Layer: L2 — Payments
Flipkart Enters Food Delivery via ONDC, Targeting August 15 Bengaluru Launch
Flipkart is preparing to launch a food delivery pilot in Bengaluru on or around August 15, built entirely on the government-backed Open Network for Digital Commerce (ONDC) rather than as a proprietary marketplace. The Walmart-owned e-commerce giant is pitching a restaurant commission of around 10%, significantly below the 16–30% charged by Swiggy and Zomato, according to Moneycontrol. The service will be available on both the main Flipkart app and a standalone food delivery app.
This is the most significant commercial validation of ONDC’s open-protocol model to date — a major e-commerce player choosing to ride the network rather than build a walled garden. It also intensifies pressure on incumbents already facing competition from Rapido’s zero-commission platform Ownly.
Layer: L4 — Commerce
UIDAI Crosses 2 Crore Biometric Updates for Schoolchildren
UIDAI announced on August 18 that it has completed over 2 crore (20 million) mandatory biometric updates (MBUs) for schoolchildren across 1.56 lakh schools nationwide under its mission-mode campaign. Biometric update services are currently free for all children aged 5–17 years until September 30, 2026. The Swarajya Mag report notes the drive links schools directly with Aadhaar to keep student records accurate for exams and welfare scheme delivery.
Separately, UIDAI has made email address updates via the Aadhaar app free from July 1 to December 31, 2026 — a small but meaningful step toward giving residents more control over their identity records without visiting enrolment centres.
Layer: L1 — Identity
MeitY Tells Parliament: CSC Operators Cannot Store Aadhaar or Banking Data
In a written response in Parliament, MeitY clarified that Common Service Centre (CSC) operators are prohibited from storing Aadhaar or banking data on their systems. The government also outlined DPDP Act implementation progress: Consent Manager registration is scheduled to begin November 13, 2026 under Phase 2 of the rules, while the Data Protection Board’s recruitment for Chairperson and four Members was advertised on June 6, 2026. The Board will operate digitally to handle citizen grievances and adjudicate data protection disputes, as reported by TechObserver.
The clarification is significant given that CSCs serve as the digital access point for millions of rural citizens — the reassurance that biometric and financial data does not persist on local operator devices addresses a long-standing privacy concern at the last mile.
Layer: L7 — Trust
TRAI Seeks Comments on QoS Amendments; MTNL Slapped with ₹12 Lakh Penalty
TRAI has invited stakeholder comments on proposed amendments to telecom and broadband quality of service (QoS) regulations, with a deadline of August 26, 2026, as reported by Storyboard18. Separately, MTNL received a ₹12 lakh financial disincentive from TRAI for quality of service violations in Q4 2025, continuing the state-run telco’s long struggle with compliance. TRAI also recently proposed specific QoS guidelines for 5G network slicing, a relatively new regulatory frontier as operators monetise differentiated network capabilities.
Layer: L7 — Trust