RBI Governor’s opinion on UPI transaction charges
While the Union minister has categorically denied any recommendations regarding charges of UPI transactions, RBI Governor Sanjay Malhotra, during this month’s MPC meeting press conference, addressed the issue bit differently.
He said that someone will eventually have to bear the costs involved in running the UPI. During the press conference on MPC announcements today, the RBI Governor said that who pays (for UPI) is less important than ensuring sustainability.
On being asked about some banks applying charges on UPI to payment aggregators and certain merchant categories, the RBI Governor said, “…there are costs, and these costs have to be paid by someone. Who pays is important, but not so important as someone footing the bill. So, it is important for us for the sustainability of the model, that whether collectively or individually, someone pays.”
He added that UPI is not free even now, as the government subsidises it. “The real question is who ultimately pays for it.”
UPI’s wild popularity and global expansion
UPI has turned into a financial inclusion enabler in India. Around 6.5 crore merchants, including new merchants or small businesses, are already connected with the UPI platform. Since its launch in 2016, the UPI platform has grown exponentially, both in terms of transaction volume and value, emerging as a blockbuster payments system. In FY25, UPI recorded a transaction volume of 18,587 crore and a transaction value of ₹261 lakh crore. UPI reached a major milestone by recording 1,947 crore transactions in July 2025 alone.
Among digital payment systems in India, UPI has shown a clear lead, enhancing financial inclusion, especially in Tier 2 and Tier 3 regions. During 2024-25, total digital payments recorded growth of 34.8% and 17.9% in volume and value terms, respectively, in FY25. UPI was a clear winner as it placed India in a leadership position with a share of 48.5% in global real-time payments by volume in FY25, according to the RBI’s annual report for FY25.
The International Monetary Fund (IMF), in its report on ‘Growing Retail Digital Payments (The Value of Interoperability)’ in June 2025 this year had recognised UPI as the world’s largest retail fast-payment system (FPS) by transaction volume. India has been working towards linking UPI with the FPSs of other countries to facilitate cross-border payments. Presently, UPI is live in 7 countries, i.e. UAE, Nepal, Bhutan, Singapore, Mauritius, France and Sri Lanka.
