Why Was UPI MDR Introduced? Finance Ministry Explains Govt's Logic, Dismisses 'US Pressure' Claim

The ministry described allegations that MDR had been introduced because of external influence as “patently false and misleading”

The Finance Ministry on Thursday rejected allegations that the introduction of Merchant Discount Rate (MDR) on select high-value UPI transactions was driven by external pressure, including concerns raised by the United States Trade Representative (USTR).

The ministry said the USTR’s 2026 report had raised two separate concerns relating to India’s digital payments ecosystem—the participation of US electronic payment services providers in UPI credit transactions and the 30 per cent market-share limit for third-party application providers.