There will be no charge for transactions through Unified Payments Interface (UPI). The Finance Ministry on Wednesday (June 11) posted on X and termed the news of charging for UPI transactions as misleading and baseless.
The ministry said, ‘Such baseless and sensational news creates fear and doubt among the people. The government is committed to promoting digital payments through UPI.’
The news of charging on UPI transactions went viral
Earlier, some media reports claimed that the central government can charge shopkeepers i.e. merchants on UPI transactions of more than Rs 3,000. For this, 0.3% Merchant Discount Rate (MDR) can be implemented again. That is, if you make a UPI payment of more than Rs 3,000, then the shopkeeper will have to pay a fee of up to Rs 9 to the bank.
A media report claimed that new rules can be implemented in 2 months. New rules can be brought in view of the increasing infrastructure and operational expenses of banks and payment service providers. Recently, a meeting of PMO, Finance Ministry and other departments has been held. The policy will be implemented only after discussion with all stakeholders (banks, fintech companies, NPCI).
UPI transactions increased by 4% in a month
In May 2025, 18,67 crore transactions were done through Unified Payment Interface (UPI). During this period, a total amount of Rs 25.14 lakh crore was transferred. The number of transactions has increased by 4% in a month.
Payment Council of India wrote a letter to the Prime Minister
Earlier, the Payment Council of India had written a letter to Prime Minister Modi. In the letter, PM Modi has been asked to reconsider the zero merchant discount rate (MDR) policy. The Council is in favor of imposing 0.3% merchant discount rate on Unified Payments Interface (UPI) and RuPay debit card transactions.
The Economic Times has given this information quoting two senior bank officials. Currently, no merchant discount rate (MDR) is levied on these payment methods, as they are provided by the National Payments Corporation of India (NPCI) facility.
How does MDR work and why was it removed?
Before 2022, merchants had to pay less than 1% of the transaction amount to the banks as MDR i.e. Merchant Discount Rate. However, the government removed these charges in the FY-22 budget to promote digital payments. Since then, UPI has become the most widely used payment method and RuPay has also become quite popular.
Meanwhile, industry insiders say that large retail merchants make more than 50% of their payments through cards on average. So a small fee is unlikely to have a major impact on UPI payments.
