There has been a big confusion, for a very long time now, that paying via UPI (like PhonePe, Google Pay, Paytm, etc.) is free. The UPI has become increasingly popular, with most of India adopting a cashless approach. According to the PIB website, in June 2025, UPI handled over ₹24.03 lakh crore in payments. Such a massive user base is. So far, the payments on UPI are free. But what about the future? So, the RBI Governor Sanjay Malhotra clarified. Learn more.
Why Was There Confusion?
The RBI Governor Sanjay Malhotra said:
- UPI, in fact, isn’t free to run. The technology required to operate (along with maintenance and security) UPI for banks and payment companies is costly.
- Apparently, these costs are covered via the government subsidies so that the technology stays free for users.
- However, this could change in the long run because someone has to pay these costs. So, users may be charged.
- As a result, the general public believed that the UPI would be charged.
What Exactly Did the Governor Clarify Now?
- He repeated: He clarified that there’s no such proposal at the moment that the RBI would start charging people. So, you can relax.
- Here’s the catch: UPI can’t be “free forever”, so someone has to bear the charges. We don’t know when.
- His main point is that for the UPI system to be sustainable, anyone, whether users or the government, must pay for the services.
Why Is UPI Sustainability a Concern?
- The UPI system has grown significantly, according to the RBI. In August 2025, UPI processed 20 billion transactions.
- This is a massive 34% jump compared to last year.To maintain such a vast user base, there are requirements for servers, cybersecurity, fraud monitoring, etc.
- At present, the bills are covered by government subsidies, so the UPI is free for everyone.
RBI Predicts UPI Daily Transactions to Hit 1 Billion Soon
RBI Governor Shaktikanta Das expects daily UPI transactions to reach 1 billion soon, up from 500 million. Extensive testing is planned before any CBDC rollout.
Nitin Konde
Leave a Reply