UPI MDR Charges: Finance Ministry Clarification
- The Union Finance Ministry on Wednesday refuted reports suggesting the government was considering levying charges on Unified Payments Interface (UPI) transactions.
- In a statement posted on social media platform X,the ministry clarified that there is no proposal to introduce a Merchant discount Rate (MDR) on UPI payments.
- The clarification addresses a recent media report that claimed the government was weighing the option of imposing MDR on high-value UPI transactions, specifically those exceeding 3,000 rupees.
The Finance ministry has decisively refuted rumors regarding UPI MDR charges, confirming that the government has absolutely no plans to levy fees on Unified Payments Interface transactions. This decisive move dismisses claims as “baseless and misleading,” assuring users that UPI remains a free and crucial element of India’s digital economy.The statement was released to counter recent reports suggesting potential MDR on high-value transactions. The government’s commitment to promoting digital payments via UPI is unwavering, and the zero-MDR policy is still in effect. News Directory 3 is following this story closely. What policy changes will further bolster India’s rapidly growing cashless economy? Discover what’s next.
India Denies UPI Transaction Charge Rumors, Reaffirming Digital Payment Push
Updated June 11, 2025
The Union Finance Ministry on Wednesday refuted reports suggesting the government was considering levying charges on Unified Payments Interface (UPI) transactions. The ministry labeled the claims as “completely false, baseless, and misleading,” dismissing concerns about potential fees for the widely used digital payment system.
In a statement posted on social media platform X,the ministry clarified that there is no proposal to introduce a Merchant discount Rate (MDR) on UPI payments. Officials stated that such speculation creates unnecessary confusion among users and businesses, especially as digital adoption grows across India. The government remains committed to promoting digital payments via UPI to foster a cashless economy.
The clarification addresses a recent media report that claimed the government was weighing the option of imposing MDR on high-value UPI transactions, specifically those exceeding 3,000 rupees. The report suggested the policy, if implemented, would aim to cover rising infrastructure and operational costs incurred by banks and payment service providers due to the surge in large digital payments.
The Payments Council of India had reportedly proposed a 0.3% MDR for large merchants accepting UPI payments, according to the same report. Discussions were supposedly underway with stakeholders, including the National Payments Corporation of India (NPCI), with a final decision expected in the coming months. Though,neither the government nor regulatory authorities have officially confirmed these deliberations.
UPI facilitates nearly 80% of India’s retail digital transactions and is a cornerstone of the country’s push toward a cashless economy. Since the launch of the zero-MDR policy in January 2020, digital payments via UPI have experienced exponential growth. Person-to-merchant transactions through UPI have surpassed 60 lakh crore rupees since 2020, demonstrating its deep integration into daily commerce.
While banks and fintech companies have previously voiced concerns over the rising cost burden of high-frequency, zero-cost transactions, the government’s stance remains unchanged. It favors maintaining a free-to-use system to support wider financial inclusion and digital conversion through UPI payments.
What’s next
With this clarification, UPI transactions will continue without additional charges for consumers or merchants. This reinforces the government’s focus on fostering a secure, accessible, and affordable digital payments ecosystem, ensuring the continued growth and adoption of UPI as a primary method for digital transactions.