UPI
UPI users alert! Charges on high-value transactions may be around the corner
The Union government may soon introduce merchant charges on Unified Payments Interface (UPI) transactions above ₹2,000, according to media reports, potentially ending the zero-cost regime for merchants on high-value digital payments.
The reports come amid speculation that the government is considering reintroducing the Merchant Discount Rate (MDR) on select UPI transactions.
Responding to a question on the possibility of levying charges on UPI payments, Reserve Bank of India (RBI) Governor Sanjay Malhotra said it was too early to comment on the matter.
"It is very premature to talk right now. The government is still carrying out the amendment. The costs have to be paid by someone. We all want this public infrastructure to continue to strengthen. Let's wait and watch for further developments on this," Malhotra was quoted as saying by NDTV.
Elaborating on the issue, the RBI Governor said the cost of maintaining the payments infrastructure was already being borne by stakeholders.
"The cost is already getting passed on. It may not be directly to the user, but someone is paying the cost. This is what I meant when I said someone will have to pay the cost. What is important is that we continue to invest and continue to find the means, whether it is MDR or other mechanisms. Let's wait and see how the situation evolves," he said.
The Unified Payments Interface (UPI), launched by the National Payments Corporation of India (NPCI) on April 11, 2016, under the regulatory oversight of the RBI, has become the backbone of India's digital payments ecosystem and a key driver of financial inclusion.
Over the past decade, UPI has witnessed exponential growth. Annual transaction volumes surged from just 2 crore transactions in FY2016-17 to more than 24,162 crore transactions in FY2025-26, representing nearly a 12,000-fold increase.
The total value of transactions also rose sharply from ₹0.07 lakh crore in FY2016-17 to around ₹314 lakh crore in FY2025-26, marking an increase of over 4,000 times.
The number of banks offering UPI services expanded from 44 in its first year of operation to 703 by FY2025-26.
In another milestone, monthly UPI transaction volumes crossed the 2,000-crore mark for the first time in August 2025, reaching 2,001 crore transactions, underscoring the platform's rapid adoption across the country.
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