Finance Ministry Debunks MDR Speculation on UPI Transactions

The Finance Ministry has refuted claims suggesting the imposition of Merchant Discount Rate (MDR) on UPI transactions, deeming them false and baseless. This announcement aims to dispel public uncertainty and affirm the government's commitment to promoting digital payments. Recent discussions have ignited debates over financial sustainability within India's digital payments ecosystem.

The Finance Ministry categorically dismissed recent speculations suggesting that a Merchant Discount Rate (MDR) would be implemented on UPI transactions. The Ministry labeled such claims as 'false, baseless, and misleading,' emphasizing that they contribute to unnecessary public fear and confusion.

In response to media reports alleging that the government might reintroduce MDR on UPI transactions exceeding Rs 3,000, the Ministry reaffirmed its dedication to supporting digital payment growth via UPI. These reports claimed that discussions were taking place to base MDR on transaction value, contradicting merchant turnover metrics.

Earlier this year, the Payments Council of India submitted a letter raising concerns about the financial sustainability of the current Zero MDR policy, highlighting the mismatch between government financial incentives and operational costs. Despite this, UPI's significance to India's digital payment infrastructure remains undiminished, evident from record-breaking transaction volumes and values.

(With inputs from agencies.)