Finance Ministry says, there is no plan to levy MDR charge on UPI transactions

The Finance Ministry has said that speculation and claims that the Merchant Discount Rate (MDR) will be charged on UPI transactions are completely false, baseless, and misleading. It said, such baseless and sensation-creating speculations cause needless uncertainty, fear and suspicion among our citizens, and the government remains fully committed to promoting digital payments via UPI. 

The official rebuttal was issued following several reports circulated online claiming that the government is planning to impose MDR on large-ticket UPI transactions. MDR is a fee that banks charge merchants for processing payments in real time. Earlier, merchants used to pay an MDR fee amounting to 1 per cent of the total transaction value on card



payments. But in 2020, the government waived off MDR charges to promote digital payments in the country.

Meanwhile, UPI processed 18.68 billion transactions in May. In value terms, UPI transactions totalled 25.14 lakh crore rupees in May, up from 23.95 lakh crore rupees in April. The May figures also mark a 33 per cent year-on-year jump in transaction volume, compared to 14.03 billion transactions recorded in the same month last year. The average daily transaction amount for May stood at 81,106 crore rupees, while the average daily transaction volume was 602 million. The success of UPI placed India in a leadership position with a share of 48.5 per cent in global real-time payments by volume.