Finance Ministry Denies MDR Charges on UPI Transactions Above ₹3,000

The Finance Ministry has firmly dismissed recent media reports suggesting that the Government of India is planning to levy Merchant Discount Rate (MDR) charges on UPI transactions above ₹3,000.

New Delhi, June 12, 2025:

The Ministry of Finance has firmly dismissed recent media reports suggesting that the Government of India is planning to levy Merchant Discount Rate (MDR) charges on UPI transactions above ₹3,000. In a tweet posted on X, the Ministry called the claims “completely false, baseless, and misleading.”

The Finance Ministry condemned the circulating rumours as “baseless and sensational,” stating that such misinformation only fuels unnecessary anxiety and mistrust among citizens, while reiterating the government’s commitment to digital payments via UPI.

Media Reports Sparked Speculation

The clarification comes after reports from several media outlets stating that the Centre was weighing the option of bringing back MDR charges for high value UPI transactions of over ₹3,000. The reports stated that the government was considering a new model where MDR would apply on individual transactions instead of merchant turnover, in order to support banks and payment service providers.

Industry Call for Policy Review
The speculation emerged against the backdrop of an appeal made earlier this year by the Payments Council of India (PCI), which represents over 180 non-banking payment operators. Later in January, the PCI wrote to the government, requesting a review of the Zero MDR policy introduced in January 2020, stating that the ₹1,500 crore incentive the government offered was not adequate for the estimated ₹10,000 crore per year required to sustain and grow the UPI ecosystem.

The council proposed introducing a nominal MDR of 0.3% for large merchants transacting via UPI, along with a similar charge on all RuPay debit card payments.

The UPI Expansion is Unstoppable
UPI keeps creating new records, regardless of many stakeholders’ concerns. In January 2025, UPI had a whopping 16.99 billion transactions alone, with the value of transactions eclipsing ₹23.48 lakh crore in value being the highest monthly total.

About 80% of retail digital payments in FY 2023–2024 were made using UPI, which processed 131 billion transactions totaling more than ₹200 lakh crores.

The Ministry’s latest clarification appears to be aimed at calming public apprehension while reinforcing its stance that digital payments via UPI will remain free of MDR charges for users.