The Finance Ministry has strongly dismissed rumours that the government is planning to impose Merchant Discount Rate (MDR) charges on UPI (Unified Payments Interface) transactions.
In an official statement, the Ministry said that the speculation circulating online is “false, baseless, and misleading.” It warned that such claims create unnecessary fear, confusion, and mistrust among citizens.
“The government remains fully committed to promoting digital payments via UPI,” the statement added.
What is MDR?
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MDR is a small fee that banks charge merchants for processing real-time payments.
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Previously, merchants paid around 1% MDR on card transactions.
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In 2020, the government waived MDR charges on UPI and RuPay payments to boost digital adoption.
Why is Clarification needed?
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Several online reports recently claimed that the government may soon impose MDR on high-value UPI transactions.
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The Ministry clarified that there is no such proposal under consideration, and these reports are pure speculation.
“I use UPI almost every day — for groceries, cabs, and bills. I’m glad the government clarified there will be no extra charge. UPI has made life so convenient.”
— Rohan Bhosale, (UPI user)“In our town, many farmers and small shopkeepers now use UPI. Keeping it free encourages more people to adopt it.”
— Raju Bhagat, farmer, Nashik district
UPI: India’s Digital Payments Success Story
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In May 2025, UPI processed 18.68 billion transactions, worth ₹25.14 lakh crore.
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This is up from ₹23.95 lakh crore in April and reflects a 33% growth over May 2024.
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On average, UPI handled:
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₹81,106 crore daily in transaction value.
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602 million transactions per day.
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UPI now accounts for 48.5% of all real-time payments globally, placing India at the forefront of digital payments innovation.
“The success of UPI has positioned India as a global leader, contributing 48.5% of the world’s real-time payment transactions by volume,” the world’s real-time payment transactions by volume,” the RBI noted.(source-ET GOV.)
