“Speculation and claims that the MDR (merchant discount rate) will be charged on UPI transactions are completely false, baseless, and misleading,” the Finance Ministry declared on Wednesday.

“Our residents experience unnecessary doubt, dread, and mistrust as a result of such irrational and sensation-generating rumors. According to the Finance Ministry, the government is still totally committed to advancing digital payments through UPI.

Following multiple online rumors that the government intended to apply MDR on expensive UPI transactions, the formal refutation was released.

Banks charge merchants MDR in exchange for real-time payment processing. In the past, retailers who accepted card payments had to pay an MDR fee equal to 1% of the whole transaction value. However, in an effort to encourage digital payments nationwide, the government eliminated MDR fees in 2020.

According to figures issued by NPCI on Sunday, UPI handled 18.68 billion transactions in May and UPI transactions in May totaled Rs 25.14 lakh crore, up from Rs 23.95 lakh crore in April.

Compared to the 14.03 billion transactions that were reported in the same month last year, the May data likewise show a 33% increase in transaction volume year over year. In May, the average daily transaction volume was 602 million, and the average daily transaction amount was Rs 81,106 crore.

With its share of the overall transaction volume increasing from 79.7% in the previous fiscal year to 83.7% in 2024–2025, the Unified Payments Interface (UPI) solidified its position as the dominant player in India’s digital payments system.

According to the RBI’s annual report, UPI enabled 185.8 billion transactions in 2024–2025—a 41% increase from the previous year. UPI transactions increased from Rs 200 lakh crore in FY24 to Rs 261 lakh crore in value terms.

“The success of UPI placed India in a leadership position with a share of 48.5 per cent in global real-time payments by volume,” the Reserve Bank of India stated.

The total amount of digital payments made in the nation, including those made through card networks, payment systems, and prepaid payment instruments (PPIs), increased by 35% from 164.4 billion in FY24 to 221.9 billion in FY25. The total value of digital payments increased 17.97% to Rs 2,862 lakh crore.