'Baseless, Sensation-Creating': Centre Says No Plan To Levy Merchant Discount Rate On UPI Transactions

The Finance Ministry has clarified that it has no plans to impose a merchant discount rate (MDR) on Unified Payments Interface (UPI) transactions, dismissing recent online claims as “completely false, baseless, and misleading.”

The ministry issued the statement on Wednesday (12 June0 following the circulation of reports suggesting the government might reintroduce MDR fees on large-value UPI payments.

MDR is a charge levied by banks on merchants for processing real-time payments and was waived in 2020 to promote digital transactions.

As reported by NDTV , the ministry said such 'sensation-creating speculations' cause unnecessary confusion and reiterated the government's commitment to encouraging digital payments through UPI.

"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," the Finance Ministry stated.

As per data released by the National Payments Corporation of India (NPCI) on 9 June, UPI processed 1,868 crore transactions worth Rs 25.14 lakh crore in May 2025, marking an increase from Rs 23.95 lakh crore in April.

The May figures represent a 33 per cent rise in transaction volume year-on-year, compared to Rs 1,403 crore transactions recorded in May 2024.

The average daily transaction volume stood at Rs 60.2 crore, while the daily transaction value was Rs 81,106 crore.

According to the Reserve Bank of India’s annual report, UPI accounted for 83.7 per cent of the total digital transaction volume in 2024–25, up from 79.7 per cent the previous year. In absolute terms, UPI facilitated 18,580 crore transactions during the year, with a total value of Rs 261 lakh crore—registering a 41 per cent rise in volume and 30.5 per cent growth in value over 2023–24.

The RBI further noted that India contributed 48.5 per cent of the world’s real-time digital payments by volume, underscoring UPI’s role in positioning the country as a global leader in the space.

Overall, digital payments in India—including UPI, card networks, and prepaid instruments—rose 35 per cent to 22,190 crore transactions in 2024–25, with the total value increasing nearly 18 per cent to Rs 2,862 lakh crore.