- UPI remains free for consumers and small merchants.
- Discussions center on sustaining infrastructure for billions of transactions.
- Ecosystem participants continually invest in UPI’s security and resilience.
Amid growing discussion around UPI and merchant charges, questions have emerged over whether consumers and small businesses could eventually have to pay for using India’s most widely used digital payment system.
Here is what the current system means for consumers, merchants and the wider UPI ecosystem.
Will Consumers Have To Pay For UPI?
No.
UPI has remained free for consumers since its launch in 2016. Users can continue making instant digital payments without paying transaction charges.
Will Small Merchants Be Charged For Accepting UPI?
No.
Small merchants, including kirana stores, are not required to pay a Merchant Discount Rate (MDR) to accept UPI payments.
UPI was designed to make digital payments accessible to even the smallest businesses across India, with the protection of small merchants remaining central to the ecosystem’s inclusive growth.
Why Are UPI Charges Being Discussed?
UPI has evolved from a new payment platform into the world’s largest real-time payment system.
As the ecosystem continues to expand, discussions are focused on how to sustainably support the infrastructure required to process billions of secure transactions every month, while continuing to protect consumers and small merchants.
Who Invests In UPI?
For nearly 10 years, banks, payment companies, fintech firms, NPCI and the RBI have collectively invested in the UPI ecosystem.
These investments cover technology, cybersecurity, fraud prevention, innovation and customer support.
The participants continue to invest in the system to ensure that UPI remains secure, resilient and available 24×7.
If UPI Is Free, Who Bears the Operating Cost?
Running a national payment infrastructure requires continuous investment in technology, fraud prevention, cybersecurity, compliance, customer support and innovation.
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These costs are currently borne by ecosystem participants, including banks and payment service providers.
Their investments allow consumers to continue accessing a safe, secure and seamless digital payment system.
Could Large Merchants Be Charged?
Even if large merchants pay for payment acceptance, consumers would not have to pay to use UPI.
Merchant service charges, where applicable, are commercial arrangements between merchants and payment service providers. Such charges do not mean consumers have to pay for making digital payments.
Merchant service charges are a standard feature of digital payment ecosystems across the world, while consumers continue to have access to convenient and secure digital payment services.
Why Is Sustaining UPI Important?
UPI has become critical national digital infrastructure and is used by hundreds of millions of Indians every day.
As transaction volumes continue to increase, sustained investment in security, resilience, innovation, fraud prevention and infrastructure will remain essential.
The objective is to ensure that UPI can continue serving consumers and businesses reliably for years to come.
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