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The Ministry of Finance has firmly denied speculation suggesting that Merchant Discount Rate (MDR) will be levied on UPI transactions. (Image source: Freepik)

The Ministry of Finance has firmly denied speculation suggesting that Merchant Discount Rate (MDR) will be levied on UPI transactions. (Image source: Freepik)

Government Dismisses MDR Rumours on UPI Transactions as ‘False and Baseless’

June 16, 2025
in Fact Check, Fintech
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The Ministry of Finance has firmly denied speculation suggesting that Merchant Discount Rate (MDR) will be levied on Unified Payments Interface (UPI) transactions. In a statement released via X (formerly Twitter), the ministry called the rumours “completely false, baseless, and misleading.”

The clarification comes amid circulating claims on social media and messaging platforms that UPI payments may soon attract MDR—a fee traditionally applied to card-based transactions and typically paid by merchants. The ministry warned that such “sensation-creating speculation” causes unnecessary fear and confusion among citizens, and emphasized that there is no change in the government’s policy.

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“Speculation and claims that the MDR will be charged on UPI transactions are completely false, baseless, and misleading. Such baseless and sensation-creating speculations cause needless uncertainty, fear and suspicion among our citizens,” the ministry tweeted.

“The Government remains fully committed to promoting digital payments via UPI,” the post further read, reinforcing India’s long-standing position of zero-cost digital payments for consumers.

UPI transactions, which have become a core part of daily commerce in India—from small roadside vendors to large retailers—currently do not attract any charges for customers or small businesses. UPI has emerged as one of the most successful digital payment systems globally, processing over 18 billion transactions in May 2025 as per recent data from the National Payments Corporation of India (NPCI). It plays a central role in driving financial inclusion and reducing cash dependency.

The Government of India, in coordination with the RBI and NPCI, has consistently supported the zero-MDR regime for UPI and RuPay debit cards to encourage widespread adoption, especially among micro and small merchants.

Tags: digital paymentsFintechMDRMinistry of Financemobile paymentsUPIUPI Transactions

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