Finance Ministry dismisses speculation of MDR charges on UPI transactions as ‘false, baseless, and misleading'
The Finance Ministry on June 11 dismissed claims that Merchant Discount Rate (MDR) charges will be applied on UPI transactions calling speculations as 'completely false, baseless, and misleading'.
In a post on X, the ministry wrote: 'Speculation and claims that the MDR will be charged on UPI transactions are completely false, baseless, and misleading. 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 added.
The clarification follows speulation that the central government was mulling re-introducing MDR on UPI transactions above ₹ 3,000 in order to support banks and payment service providers, according to an ANI report.
Further, reports citing sources also speculated that discussions were underway over allowing MDR based on transaction value rather than merchant turnover, it added.
The Payments Council of India (PCI) had in March submitted a letter to the Centre seeking 'urgent reconsideration of the zero MDR policy for Unified Payments Interface and RuPay debit card transactions', as per the report.
PCI is an 180-member industry body that represents various non-banking payment industry players.
In the letter, the industry body highlighted the pressing financial sustainability concerns facing the digital payments ecosystem due to the continued Zero MDR policy, which has been in effect since January 2020.
While the government has provided financial incentives to offset some of the ecosystem's operational costs, the letter points out that the INR 1,500 crore allocation covers only a fraction of the estimated ₹ 10,000 crore annual cost required to maintain and expand UPI services.
To address the challenge, the industry proposed the introduction of an MDR for RuPay debit cards for all merchants and a reasonable MDR of 0.3 per cent for UPI only for large merchants.
As per the official data, for the first time, UPI transactions in the month of January 2025 surpassed 16.99 billion and the value exceeded ₹ 23.48 lakh crore, marking the highest number recorded in any month.
The government data shows that for FY 2023-24, the UPI remains the cornerstone of India's digital payment ecosystem, contributing to 80 per cent of the retail payments across the country. The total transaction volume exceeded 131 billion and the value exceeded ₹ 200 lakh crore for FY 2023-24.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Hindu
17 minutes ago
- The Hindu
India positioned to become world's third-largest economy: PM Modi in Cyprus
India will soon become the third-largest economy in the world, Prime Minister Narendra Modi has said, highlighting myriad economic opportunities the country offers to companies from Cyprus. PM Modi, who is in Cyprus on the first leg of his three-nation tour, made the remarks as he, along with Cypriot President Nikos Christodoulides, attended a business roundtable on Sunday (June 15, 2025) in Limassol, a city on the southern coast of Cyprus. 'The Prime Minister highlighted India's rapid economic transformation in the last 11 years and noted that the country, propelled by next-generation reforms, policy predictability, stable polity and Ease of Doing Business, has become the fastest-growing major economy in the world,' the External Affairs Ministry in New Delhi said in a statement. Emphasising the primacy being given to innovation, digital revolution, start-ups and futuristic infrastructure development, Mr. Modi expressed confidence that India, the fourth largest economy in the world, was well positioned to become the third largest in a few years' time. "India will soon become the third-largest economy in the world. India is one of the biggest emerging economies. We have implemented tax reforms, Goods and Services Tax, rationalised corporate tax, decriminalised laws, and are focussing on 'trust of doing business', along with ease of doing business." He said that steady growth in India's civil aviation, port, shipbuilding, digital payments and green development sectors has opened myriad opportunities for companies from Cyprus to partner with India, according to the statement. "For the first time in 23 years, an Indian Prime Minister has visited Cyprus, and the first event that has been organised is the business roundtable meeting. This shows the importance of business leaders in the India-Cyprus relationship," the Prime Minister said. He also underlined the strengths of India's skilled talent and start-up ecosystem and highlighted manufacturing, AI, quantum, semiconductor and critical minerals as new and emerging areas contributing to India's growth story. "You all [business leaders] are aware of India's talent and demographic dividend. In the last 10 years, a digital revolution has taken place in India. Around 50% of the world's digital transactions take place in India, thanks to the Unified Payments Interface or UPI. Countries like France are associated with this, and talks are also under way with Cyprus for this, and I welcome this move," he said. Prime Minister Modi noted that Cyprus was a significant economic partner for India, particularly in the Foreign Direct Investment sector and welcomed the keen interest in Cyprus for new investments into the Indian economy. PM Modi highlighted the "immense potential for growth" in bilateral ties. Cyprus has been a "reliable partner to India for a long time now," he said. Mr. Modi called Cyprus a "famous tourist destination" and added that India, too, is focussing on destination development and management, and so, "close collaboration between our tour operators will be a 'win-win'". He added that many other sectors also have the potential for such collaborations. 'Highlighting the potential for business engagement in the financial services sector, the two leaders welcomed the signing of an MOU between the NSE International Exchange GIFT CITY, Gujarat and the Cyprus Stock Exchange,' the statement said. 'NIPL (NPCI International Payments Limited) and the Eurobank Cyprus reached an understanding on introducing UPI for cross-border payments between the two countries, which would benefit tourists and businesses,' it said. Prime Minister also welcomed the launch of the India–Greece–Cyprus (IGC) Business and Investment Council, which will foster trilateral cooperation in sectors such as shipping, logistics, renewable energy, civil aviation and digital services. Prime Minister Modi welcomed the fact that many Indian companies see Cyprus as a gateway to Europe and a hub for IT services, financial management, and tourism. 'As Cyprus prepares to assume the Presidency of the EU Council next year, the two leaders reaffirmed their commitment to further strengthen India-EU Strategic Partnership,' the statement said. They expressed optimism about concluding the India-EU Free Trade Agreement by the end of the year which would also give a major boost to trade and economic cooperation between the two countries. Prime Minister underlined that the business roundtable had given practical suggestions which would form the basis for a structured economic roadmap, ensuring long-term collaboration in trade, innovation and strategic sectors. 'With shared aspirations and a future-focussed approach, India and Cyprus are poised for a new era of dynamic and mutually beneficial economic cooperation,' the statement said. The participants of the roundtable represented diverse sectors such as banking, financial institutions, manufacturing, defence, logistics, maritime, shipping, technology, innovation, digital technologies, AI, IT services, tourism and mobility. In a post on X after the meeting, Mr. Modi said, "Boosting business linkages! President Nikos Christodoulides and I interacted with leading CEOs in order to add vigour to commercial linkages between India and Cyprus. Sectors such as innovation, energy, technology and more offer immense potential. I also talked about India's reform trajectory in the last decade."
Time of India
an hour ago
- Time of India
‘Won't Stop Until Entire Israel…': Iran's IRGC Announces CHILLING Operation After Intel Boss Killed
PM Modi Announces Talks to Include Cyprus in UPI, Hails India's Digital Payment Revolution In a landmark announcement at the India-Cyprus CEO Forum in Limassol, Prime Minister Narendra Modi revealed that talks are underway to bring Cyprus into the Unified Payments Interface (UPI) network. Highlighting India's digital transformation, PM Modi stated that 50% of global digital transactions now occur in India through UPI. He welcomed Cyprus' potential inclusion, pointing to the growing global footprint of India's real-time payment system, already adopted by countries like France. Modi also emphasized India's innovation-driven growth, noting over 1 lakh startups are powering solutions worldwide. From massive infrastructure investments to new policies in shipbuilding and aviation, the address showcased India's rising global economic influence and strong fintech leadership. The collaboration with Cyprus marks a bold step in expanding India's financial and technological diplomacy.#PMModi #ModiInCyprus #UPIExpansion #DigitalIndia #FintechDiplomacy #IndiaCyprusRelations #NarendraModi #IndiaUPI #GlobalUPI #UPIGoesGlobal #IndianEconomy #toi #toibharat #bharat #breakingnews #indianews 161 views | 2 hours ago
India Today
an hour ago
- India Today
UPI transactions set to get faster from June 16, more upgrades on the way
The Unified Payments Interface (UPI) has made it quick and easy for Indians to send and receive money online. Now, it's set to become even faster. Beginning today, UPI transactions will be processed more swiftly, and several other important changes are planned for implementation after to a circular issued by the National Payments Corporation of India (NPCI) on April 26, 2025, the goal is to reduce the response time for various UPI services, thereby improving the overall user experience. These improvements will benefit banks, users, and popular payment apps like PhonePe, Google Pay, and RESPONSE TIME TO BE HALVEDThe NPCI is working on improving the speed of UPI transactions. For example:Transactions such as money transfers, transaction status checks, and reversals that earlier took 30 seconds will now be completed in 10 to 15 UPI addresses (like mobile numbers or UPI IDs) will now take just 10 seconds, instead of 15 seconds improvements will ensure users face fewer delays during UPI payments. The NPCI has instructed all member banks and payment service providers to update their systems to meet these new time CHANGES COMING IN AUGUSTAnother circular issued on May 21, 2025, discusses further changes that will come into effect in August. These updates aim to enhance the security and reliability of UPI, particularly during peak traffic are the key upcoming changes:Balance Enquiry Limit: Users can check their bank balance up to 50 times per day through their UPI of Linked Accounts: Customers can view up to 25 linked accounts per day in the Mandate Rules: For automatic payments, only 1 attempt and 3 retries will be allowed for each mandate. These retries will happen only during non-peak hours to avoid adding pressure during busy UPI hours have been defined as 10:00 am to 1:00 pm and 5:00 pm to 9:30 pm, when transactions are at their highest. NPCI has asked all banks and partners to follow these guidelines and make the necessary system updates by July 31, digital payment system is getting faster, smarter, and more controlled. With quicker transactions and stricter rules to manage traffic and retries, users can expect an even smoother UPI experience in the coming months.
