Finance Ministry Dismisses Rumours of Charges on UPI Transactions, Calls Reports ‘Baseless’
New Delhi, 12th June 2025 – The Ministry of Finance has clarified that there will be no charges imposed on Unified Payments Interface (UPI) transactions, countering viral media reports that suggested otherwise. In an official post on social media platform X (formerly Twitter) on Wednesday, the ministry termed the claims as “misleading and baseless.”
The clarification comes in response to widespread speculation that the government was considering levying a 0.3% Merchant Discount Rate (MDR) on UPI transactions above ₹3,000 for shopkeepers. Several news reports claimed the move was under discussion to offset rising infrastructure and operational costs for banks and payment service providers.
“Such baseless and sensational news creates fear and doubt among the people. The government is committed to promoting digital payments through UPI,” the Finance Ministry posted.
According to the reports, new rules could be introduced within two months following recent consultations between the Prime Minister’s Office, Finance Ministry, and other stakeholders, including banks, fintech firms, and the National Payments Corporation of India (NPCI).
UPI Transactions on the Rise
UPI continues to dominate India’s digital payments landscape. In May 2025, the platform processed over 18.67 crore transactions, amounting to ₹25.14 lakh crore, registering a 4% monthly increase. The growth reaffirms UPI’s position as the most preferred digital payment method across the country.
Payment Council Pushes for MDR Reintroduction
Amid this backdrop, the Payment Council of India has written to Prime Minister Narendra Modi urging reconsideration of the Zero MDR policy. The council supports a nominal 0.3% MDR on UPI and RuPay debit card payments to ensure long-term sustainability for payment providers and banks.
Currently, no MDR is levied on these platforms, a policy introduced in the FY 2021–22 Union Budget to promote digital transactions. Before that, merchants paid up to 1% of the transaction value as MDR.
Industry Divided on Impact
While digital payment companies argue that a small fee would support infrastructure maintenance, others suggest it may not significantly affect usage. Industry insiders note that large-format retailers already process more than 50% of their payments via cards, indicating that UPI’s convenience may outweigh the effect of any minor charges—should they be implemented in the future.
For now, however, the Finance Ministry has confirmed that UPI transactions will remain free of cost, urging citizens not to fall for speculative or unverified information.
