One has to only look at the numbers put out by the NPCI to understand impact of UPI in India. The monthly value of UPI transactions grew from ₹3,098 crore in Jun-17 to ₹5.47 trillion in Jun-21; and to a whopping ₹24.04 trillion in Jun-25. No doubt; UPI has been one of the biggest success stories in Indian fintech, and while a number of factors converged, it is to the credit of the current government that they took UPI to its logical journey. UPI accounts for 83% of fund transfer volumes in India. Charging for UPI at this stage may lead to forfeiting these gains. 

The impact of UPI is not just in terms of the numbers. Firstly, the government is able to track business transactions very easily with UPI flows. This reduces the cash economy leakages. Secondly, it has been a boon to millions of small ticket fund transfers, which have picked up as it has no cost and they avoid the risks of informal fund transfer mechanisms. The third big advantage is its simplicity, since there is no process like NEFT or RTGS. It is ID or QR based transfer. Above all, the UPI has been responsible for making IPO and stock markets quick and efficient. 

The intent of the RBI governor when he spoke about charging for UPI was that there was a cost to providing UPI and it had to be borne by somebody. Between 2018 and 2023, the government had spent close to ₹3,700 crore as subsidies to the banks to provide UPI services, which includes the banking backbone as well as the payment gateway. Unlike in other credit card transactions, MDR on UPI transactions is not permitted. That is why there is a proposal to start making people pay for UPI transactions. This may start for larger transactions, while keeping the very small ticket transactions still out of UPI charges. However, the final call will be taken by the government and it would still be a very political issue. 

A simple suggestion is to subsidize UPI with minimum average balance (MAB) charges. The statistics is mind-boggling. Between 2018 and 2023, large Indian banks collected ₹35,800 crore as MAB, ATM, and cheque book charges. The entire cost of UPI is just 10% of this cost, so the banks can as well foot the UPI bill. This spares the end customer, and still recovers costs. In addition, each NCLT resolution case can be asked to transfer part of the proceeds to UPI support fund. The defaulters are causing bank stress, after all. Whatever the final answer, for the consumers the UPI must be kept free. Why dilute such a fantastic idea?