The Ministry of Finance has officially dismissed claims suggesting that Merchant Discount Rate (MDR) will be imposed on Unified Payments Interface (UPI) transactions. In a tweet, the ministry clarified that “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 Government remains fully committed to promoting digital payments via UPI payments without burdening citizens,” it added.
Speculation and claims that the MDR will be charged on UPI transactions are completely false, baseless, and misleading.
— Ministry of Finance (@FinMinIndia) June 11, 2025
Such baseless and sensation-creating speculations cause needless uncertainty, fear and suspicion among our citizens.
The Government remains fully committed…
What Is MDR and Why Does It Matter?
MDR (Merchant Discount Rate) is a fee charged to merchants for processing digital transactions, typically associated with debit/credit card payments. Rumors suggested it would be extended to UPI, raising concerns among small businesses and everyday users. However, the Finance Ministry has completely ruled this out.
UPI Remains Free for All
As per the current policy and official communications:
- No fees are charged to customers for sending or receiving money via UPI.
- Merchants are not charged MDR for accepting UPI payments.
- Platforms like Paytm continue to offer UPI services at zero cost to both senders and receivers.
Government’s Continued Commitment to Digital Payments
UPI has been instrumental in India’s digital payments revolution, recording over 18.67 billion transactions worth ₹25.14 lakh crore in May 2025 alone. The government recognizes this success and remains committed to its financial inclusion goals through:
- Zero MDR on UPI
- Incentivizing banks and fintechs
- Strengthening UPI infrastructure for scalability
- Supporting innovations like UPI Lite, UPI Autopay, and UPI for International Payments
Why UPI Is Important for India’s Economy
UPI supports over 300 million users and 50 million merchants across the country, including small businesses, local kirana stores, and gig workers. Charging a fee could discourage adoption and create barriers to financial inclusion.
The Finance Ministry’s firm stance provides clarity and assurance to millions relying on free digital transactions, especially in Tier 2 and Tier 3 cities where UPI has become the go-to mode for daily payments.
What You Should Do as a UPI User
- Ignore rumors about UPI transaction fees unless officially confirmed by NPCI or RBI.
- Continue using UPI on platforms like Paytm for seamless, zero-cost digital payments.
- Stay updated through verified government sources like @FinMinIndia or NPCI’s official handles.
Conclusion: The Government of India has once again made it clear: there is no MDR or any charge on UPI transactions. The Finance Ministry’s strong clarification should put an end to unfounded speculation and ensure public confidence in India’s most widely used digital payment platform.
With UPI growing stronger every month, the government remains focused on keeping UPI transactions free, fast, and accessible for all.
