Govt denies reports of MDR charges on UPI transactions: 'Completely false, baseless, and misleading'

The Ministry of Finance on Wednesday dismissed reports that Merchant Discount Rates (MDR) would be levied on Unified Payments Interface (UPI) transactions, calling the claims “completely false, baseless, and misleading.”

The clarification comes after a report by NDTV Profit suggested that the government was reviewing the current zero-MDR regime, particularly for high-value UPI transactions exceeding Rs 3,000. According to the report, a proposal was under discussion to introduce MDR on such payments to help banks and payment service providers make the system more financially sustainable.

"Speculation and claims that the MDR will be charged on UPI transactions are completely false, baseless, and misleading," the Finance Ministry posted on X.

"Such baseless and sensation-creating speculations cause needless uncertainty, fear and suspicion among our citizens. The Government remains fully committed to promoting digital payments via UPI."

Introduced in 2016, UPI currently accounts for about 80% of retail digital payments in India. Since January 2020, UPI transactions have been exempt from MDR, a fee typically charged to merchants by banks for processing digital payments.

The NDTV Profit report, citing people familiar with the matter, said the government may consider applying MDR selectively on large-ticket transactions, while small-value payments would remain exempt.

The Payments Council of India has proposed a 0.3% MDR for large merchants on UPI transactions. By comparison, credit and debit card transactions in India currently attract MDRs ranging from 0.9% to 2%. RuPay credit cards are expected to remain exempt from MDR charges, the report said.

UPI hit a record 18.68 billion transactions in May, up from 17.89 billion in April, according to the National Payments Corporation of India (NPCI).

In terms of value, UPI transactions surged to ₹25.14 lakh crore in May 2025 from April’s ₹23.95 lakh crore.

“The success of UPI has positioned India as a global leader, accounting for 48.5 per cent of global real-time payments by volume,” the Reserve Bank of India (RBI) said in its annual report.