India’s Ministry of Finance confirmed on June 12 that no Merchant Discount Rate (MDR) will be levied on UPI transactions, dismissing recent media speculation.
India’s Ministry of Finance has reaffirmed its commitment to promoting digital payments across the country by announcing that no Merchant Discount Rate (MDR) will be levied on Unified Payments Interface (UPI) transactions. The statement was issued to dismiss recent speculations that had suggested otherwise.
The Ministry emphasized that such claims are “baseless and misleading,” reiterating that UPI will continue to remain free for merchants and users alike. The government’s clear stance aligns with its larger goal of expanding cashless payments and making digital financial systems more accessible and affordable.
UPI, a real-time payment system developed by the National Payments Corporation of India (NPCI), has grown exponentially, becoming one of the most preferred digital payment modes in India. As of 2025, UPI handles billions of transactions monthly, contributing significantly to the financial inclusion goals of the Indian government.
The government’s move to maintain zero MDR helps ensure that merchants across urban and rural India do not face any charges for accepting UPI-based payments. This is particularly crucial for small businesses and self-employed vendors who rely heavily on UPI due to its ease of use and zero-cost structure.
While there have been conversations within industry circles regarding introducing a nominal MDR for UPI payments to sustain infrastructure costs, the Finance Ministry has made it clear that there is no such proposal under consideration at this time.
The statement strengthens the Centre’s ongoing policy framework to promote digital transactions and eliminate barriers to digital payment adoption in India.
