Is the Finance Ministry planning to impose MDR on UPI transactions?
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Synopsis
In a decisive statement, the Finance Ministry has dismissed rumors about introducing MDR charges on UPI transactions as false and misleading. This move aims to quell uncertainty among citizens while reaffirming the government's commitment to promoting digital payments. UPI continues to thrive, with millions of transactions processed daily, reinforcing its dominance in India's digital payment landscape.
Key Takeaways
- No MDR charges on UPI transactions.
- UPI processed 18.68 billion transactions in May.
- Value of UPI transactions reached Rs 25.14 lakh crore.
- 33 percent year-on-year increase in transaction volume.
- UPI dominates with 83.7 percent of total transaction volume.
New Delhi, June 11 (NationPress) The Finance Ministry has clarified that claims and rumors suggesting that the MDR (merchant discount rate) will be imposed on UPI transactions are entirely untrue, unfounded, and misleading.
Such unfounded allegations create unnecessary anxiety, fear, and doubt among citizens. The government is unwavering in its commitment to fostering digital payments through UPI, the Finance Ministry emphasized.
This official statement came in response to various online reports alleging that the government intended to introduce MDR for high-value UPI transactions.
MDR refers to the fee that banks charge merchants for facilitating real-time payment processing. Previously, merchants paid an MDR fee of about 1 percent on card payments. However, in 2020, the government abolished MDR fees to encourage digital transactions across the nation.
According to data released by NPCI on Sunday, UPI processed a staggering 18.68 billion transactions in May.
In terms of value, UPI transactions reached Rs 25.14 lakh crore in May, increasing from Rs 23.95 lakh crore in April, as reported by NPCI.
The figures for May also reflect a remarkable 33 percent year-on-year increase in transaction volume, compared to 14.03 billion transactions noted in the same month last year. The average daily transaction amount for May was Rs 81,106 crore, with an average daily transaction volume of 602 million.
The Unified Payments Interface (UPI) has solidified its position in India’s digital payment ecosystem, with its share of total transaction volume climbing to 83.7 percent in 2024-25, up from 79.7 percent in the previous fiscal year.
The RBI’s annual report indicates that UPI enabled 185.8 billion transactions during 2024-25, marking a 41 percent year-on-year growth. In terms of value, UPI transactions escalated to Rs 261 lakh crore from Rs 200 lakh crore in FY24.
The triumph of UPI has positioned India as a leader in global real-time payments, accounting for 48.5 percent by volume, as highlighted by the RBI.
Total digital payments in the nation, encompassing transactions via payment systems, card networks, and prepaid payment instruments (PPIs), surged by 35 percent to 221.9 billion in FY25, compared to 164.4 billion transactions in FY24. In value terms, digital payments skyrocketed by 17.97 percent to Rs 2,862 lakh crore.
Point of View
It is crucial to rely on verified information. The Finance Ministry's clarification should reassure the public. With the dramatic growth in UPI transactions, the government's ongoing commitment to enhancing digital payment infrastructure is commendable. It underscores the importance of transparency and trust in financial communications.
NationPress
12/06/2025
Frequently Asked Questions
Will MDR be charged on UPI transactions?
No, the Finance Ministry has confirmed that there are no plans to levy MDR charges on UPI transactions.
What is MDR?
MDR, or Merchant Discount Rate, is a fee charged by banks to merchants for processing payments. It has been waived for UPI transactions since 2020.
How many transactions were processed via UPI in May?
UPI processed a total of 18.68 billion transactions in May.
What was the total value of UPI transactions in May?
The total value of UPI transactions in May was Rs 25.14 lakh crore.
How does UPI's growth compare to previous years?
UPI has seen a 33 percent year-on-year increase in transaction volume compared to the same month last year.
