No levy to be charged on UPI transactions, clarifies FinMin

The Finance Ministry has said no Merchant Discount Rate (MDR) will be levied on transactions through Unified Payments Interface platforms.

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“Speculation and claims that the MDR will be charged on UPI transactions are completely false, baseless, and misleading,” the Ministry said in a post on X on Wednesday.

“Such baseless and sensation-creating speculations cause needless uncertainty, fear and suspicion among our citizens. The Government remains fully committed to promoting digital payments via UPI,” it said.

MDR is the cost paid by a merchant to a bank for accepting payment from their customers via digital means. The merchant discount rate is expressed in percentage of the transaction amount.

The ministry’s clarification came following some reports that the government is planning to impose MDR on large-ticket UPI transactions.