Thu Jun 12 09:30:00 UTC 2025: **News Article:**

**Finance Ministry Denies MDR Charges on UPI Transactions, Calls Reports ‘Baseless’**

**New Delhi -** The Finance Ministry has refuted widespread speculation regarding the re-introduction of Merchant Discount Rate (MDR) charges on Unified Payments Interface (UPI) transactions. In a statement released on X, the ministry firmly dismissed the claims as “completely false, baseless, and misleading,” emphasizing the government’s unwavering commitment to promoting digital payments via UPI.

The denial comes amidst reports suggesting the government was considering re-introducing MDR on UPI transactions exceeding ₹3,000 to support banks and payment service providers. These reports also indicated discussions were underway to allow MDR based on transaction value rather than merchant turnover.

The Payments Council of India (PCI), an industry body representing non-banking payment players, had previously urged the government to reconsider the zero MDR policy for UPI and RuPay debit card transactions, citing “pressing financial sustainability concerns.” The PCI argued that the zero MDR policy, in effect since January 2020, has created a significant financial burden on the digital payments ecosystem.

While the government has provided financial incentives to offset operational costs, the PCI claims it covers only a fraction of the estimated ₹10,000 crore annual cost needed to maintain and expand UPI services. The PCI proposed a reasonable 0.3% MDR for UPI, but only for large merchants.

Despite these concerns, the Finance Ministry has reiterated its dedication to supporting digital payments through UPI. Official data reveals that UPI remains a cornerstone of India’s digital payment ecosystem, accounting for 80% of retail payments. In January 2024, UPI transactions surpassed 16.99 billion with a value exceeding ₹23.48 lakh crore, the highest figures recorded in any month. For the fiscal year 2023-24, UPI transactions exceeded 131 billion, with a total value of ₹200 lakh crore.

The Finance Ministry’s swift denial aims to quell uncertainty and reassure citizens that UPI transactions will continue to remain free of MDR charges.

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