New Delhi: The Finance Ministry has categorically denied online reports suggesting that the government is planning to impose a Merchant Discount Rate (MDR) on Unified Payments Interface (UPI) transactions, calling such claims “false, baseless, and misleading.”
In an official statement issued on Wednesday, the Ministry said, “Speculation and claims that the MDR will be charged on UPI transactions are completely false. Such baseless and sensational speculation creates unnecessary uncertainty, fear, and suspicion among citizens.”
The clarification came amid social media chatter and unverified reports claiming that MDR would be levied on high-value UPI payments. MDR is a fee paid by merchants to banks for processing digital transactions—something the government waived off in 2020 to encourage digital payment adoption.
Reiterating its commitment to digital India, the ministry said the government will continue promoting seamless and zero-cost digital payments through platforms like UPI.
UPI Continues Its Growth Surge
UPI remains a key pillar of India’s digital economy. In May 2025 alone, the platform processed 18.68 billion transactions worth ₹25.14 lakh crore, according to data from the National Payments Corporation of India (NPCI). This reflects an increase from April’s ₹23.95 lakh crore and marks a 33% year-on-year growth from 14.03 billion transactions in May 2024.
The average daily UPI transaction volume in May stood at 602 million, while the average daily transaction value was ₹81,106 crore.
According to the Reserve Bank of India’s annual report, UPI’s share of total transaction volume in India rose to 83.7% in FY 2024–25, up from 79.7% the previous year. The platform facilitated 185.8 billion transactions worth ₹261 lakh crore—a 41% increase in volume and a significant jump in value from ₹200 lakh crore in FY24.
The RBI also highlighted India’s global leadership in digital payments, noting that UPI accounted for 48.5% of global real-time transactions by volume.
Overall, India’s total digital payment ecosystem—including card networks, prepaid instruments, and other platforms—saw 221.9 billion transactions in FY25, up 35% from the previous year. The total value of digital payments reached ₹2,862 lakh crore, registering a 17.97% growth over FY24.
The government’s latest clarification reaffirms its vision of maintaining zero-cost, high-volume digital infrastructure to support financial inclusion and economic growth.
