The Finance Ministry on Wednesday dismissed reports suggesting that the government was considering imposing Merchant Discount Rate (MDR) on Unified Payments Interface (UPI) transactions, calling them “completely false, baseless and misleading.”
In a post on X (formerly Twitter), the ministry said:
-“Speculation and claims that MDR will be charged on UPI transactions are completely false. Such baseless and sensation-creating speculation causes needless uncertainty, fear and suspicion among our citizens.”
The ministry reaffirmed the government’s “full commitment to promoting digital payments via UPI,” adding that no changes have been made to the zero-MDR regime.
MDR refers to the fee merchants pay to banks for accepting digital payments and is usually a percentage of the transaction value. There had been online speculation that the government may impose MDR on high-value UPI transactions, prompting the ministry’s clarification.
The announcement came as UPI transactions hit a new record in May, touching ₹25.14 lakh crore, a 5% increase from ₹23.94 lakh crore in April, according to data from the National Payments Corporation of India (NPCI).
In terms of volume, 1,867.7 crore transactions were processed in May, up from 1,789.3 crore the previous month. Compared to May 2024, the value of UPI transactions grew 23% year-on-year, from ₹20.44 lakh crore.
The surge in UPI usage reflects the growing trust and reliance on India’s flagship digital payment platform, and the government’s decision to keep UPI free of MDR aims to further encourage its widespread adoption.
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