UPI Payment : There is an important news for those who make digital payments. The government is now considering imposing a charge on UPI transactions of Rs 3,000 or more. The government can impose MDR i.e.
Merchant Discount Rate. Till now, neither the customer has to pay any charge for making payment through UPI nor any fee is taken from the traders. This is called Zero MDR Policy. But now this system can change on UPI payments of Rs 3,000 or more.
What is MDR fee?
MDR is actually a fee that banks or payment app companies charge traders when a customer makes a payment through UPI. The government is currently thinking of imposing such a charge only on transactions of more than Rs 3,000. This means that common people who make small everyday purchases through UPI, such as ordering vegetables, groceries, milk or food online, will not be affected.
Why is the government considering imposing MDR?
The purpose of this proposal is to provide a permanent source of income to banks and UPI payment companies so that they can run this service for a long time without any loss. The Payment Council of India has already recommended the government to end the Zero MDR policy. The need for this change is also being felt because the use of UPI is increasing tremendously in India.
On June 1, 2025, there were 644 million (64.4 crore) UPI transactions.
On June 2, 2025, this figure reached 650 million (65 crores).
These figures indicate that UPI is now set to overtake international payment companies such as Visa. For example, Visa’s average daily transaction is estimated to be around 639 million. In May 2025, there were more than 14 billion (1,400 crore) UPI transactions in India, with a total value of more than Rs 20 lakh crore.
The government says that if a small MDR is charged on large transactions, then the digital payment system can be strengthened further and banks will be helped in its operation. At present, this proposal is in initial discussions, and before implementing it, the government will talk to traders and payment companies. But it is certain that small payments through UPI will remain free for common people as before.
