Hyderabad: Telangana BJP president N. Ramchander Rao said UPI P2P payments would remain free regardless of the amount transferred.
Rao said the claim that the government planned to impose charges on UPI transactions was misinformation. He said the Merchant Discount Rate, or MDR, was not a government tax.
Instead, he described MDR as a payment made to banks and payment-service providers for processing transactions. He said merchant payments of up to ₹2,000 would also remain free.
Rao said transactions covered by the zero-MDR framework would not attract charges. He also said about 96 per cent of person-to-merchant transactions would remain unaffected.
RuPay debit-card payments would also continue without charges, according to Rao. He said the government had provided financial incentives to support the digital payments ecosystem.
Rao cited incentives of ₹1,389 crore, ₹2,210 crore and ₹3,631 crore during the financial years from 2022 to 2024. He also referred to an additional ₹2,196.21 crore provided for the period from 2024 to 2025–26.
The government also allocated ₹2,000 crore in the Budget for 2026–27, Rao said. He linked the continued expansion of digital payments with the need for investment in payment infrastructure.
UPI P2P payments and the MDR framework
Rao said UPI P2P payments would remain free as the payment ecosystem expanded. He also cited UPI transaction data to underline the scale of digital payments.
UPI recorded 24,162 crore transactions worth ₹314.23 lakh crore during FY 2025–26, according to Rao. That worked out to an average of about 66 crore transactions each day.
Rao said rising digital payment volumes would require substantial investment in information technology infrastructure. He said such investment was needed to maintain long-term reliability and sustainability.
He also clarified his position on MDR and said it should not be viewed as a tax or government charge. According to Rao, the amount was distributed among participants in the payment ecosystem.
He said the funds supported payment operations, maintenance and infrastructure needed for digital transactions.
Rao maintained that UPI P2P payments would continue without charges while the payment ecosystem expanded to handle higher transaction volumes.
