The Ministry of Finance has firmly refuted online speculation suggesting that Merchant Discount Rate (MDR) would be imposed on UPI transactions. The Ministry termed these claims as false, baseless, and misleading, emphasizing that such rumours only serve to create unnecessary panic and confusion among the public.
Reiterating its dedication to a cashless economy, the Ministry stated that the government remains fully committed to promoting digital payments through UPI, and has no plans to reverse the existing zero-MDR policy. The clarification came after certain reports claimed that MDR charges would be levied on large-ticket UPI transactions.
MDR (Merchant Discount Rate) is a fee that banks charge merchants for processing payments in real time. Before 2020, merchants were charged an MDR of around 1% on card transactions. However, in a major push to digital payments, the government waived MDR charges on UPI and RuPay debit card transactions to encourage adoption.
Amidst this backdrop, the Unified Payments Interface (UPI) recorded an impressive 18.68 billion transactions in May, representing a 33% year-on-year increase. The total transaction value stood at ₹25.14 lakh crore, up from ₹23.95 lakh crore in April.
- Average daily transaction volume: 602 million
- Average daily transaction value: ₹81,106 crore
These figures underscore UPI’s growing popularity and efficiency, with India now accounting for 48.5% of all global real-time payments by volume—the highest in the world.
The exponential rise in UPI usage continues to reinforce India’s global leadership in digital payments. The Finance Ministry’s clarification comes as a reassurance to citizens and businesses alike, ensuring trust and stability in the digital payments ecosystem.
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