Finance Ministry dismisses reports on MDR for UPI as 'false and misleading'

Earlier in the day, social media and news platforms were abuzz with claims suggesting the government was planning to introduce MDR charges on large-value UPI transactions.

Responding with a strongly worded clarification, the ministry said such “baseless and sensational speculations” were creating unwarranted confusion and mistrust among citizens.

Although UPI continues to remain free of merchant charges, a debate is simmering among industry players over whether high-value transactions should attract a nominal MDR to help manage the growing costs of maintaining the digital payments infrastructure, according to an NDTV Profit report.

UPI now facilitates nearly 80% of retail digital payments, with person-to-merchant transfers alone crossing ₹60 lakh crore since 2020.

The Payments Council of India has proposed a 0.3% MDR for large merchants—much lower than the 0.9%–2% typically charged on most debit and credit card transactions (except those on RuPay). Sources indicated that RuPay credit cards are likely to remain exempt from any such charge, said the NDTV Profit.

While the government has maintained UPI’s zero-charge model for now, the broader policy conversation on the sustainability of digital payment ecosystems remains open.