Will UPI transactions soon carry a charge too? Here’s what RBI Governor says, ‘Important for us…., know what it means for Paytm, Google Pay, PhonePe users

India has emerged as the global leader in fast payments, according to a recent note by the International Monetary Fund titled Growing Retail Digital Payments: The Value of Interoperability.

Will UPI remain free? Reserve Bank of India(RBI) Governor Sanjay Malhotra stated that it might not. UPI has made digital payments easy and mostly free for people, but running such a big system costs a lot of money. Earlier on Wednesday, RBI Governor Sanjay Malhotra stated that UPI might not be free forever. Eventually, someone is going to have to cover the cost of employing the digital payments system. While speaking at the post-Monetary Policy Committee (MPC) press conference, Malhotra stated, “I never said that UPI can stay free forever. What I said was there are costs (associated with UPI transactions), and they need to be paid for by someone,” reported Economics Times.

What did the RBI Governor say about UPI being free forever?

“Who pays is important but not so important than someone footing the bill. So, it is important for us for the sustainability of the model, that whether collectively or individually someone pays,” said Malhotra. His comments have led to worries that the free UPI services people are using today won’t be free for long. There is now speculation that either banks or the government could charge a fee for UPI transactions to help fund the costs of the service.

India has emerged as the global leader in fast payments, according to a recent note by the International Monetary Fund titled Growing Retail Digital Payments: The Value of Interoperability. At the heart of this transformation is the Unified Payments Interface, better known as UPI.

UPI is responsible for close to 85% of all digital transactions in India. The UPI handles over 60% of digital transactions worldwide. In June 2025, UPI logged 18.39 billion transactions at the value of Rs 24 lakh crores, which is a 32% increase from last year.

Launched in 2016 by the National Payments Corporation of India, UPI has changed how people send and receive money in the country. It brings all your bank accounts together in one mobile app. One can transfer money instantly, pay merchants, or send funds to friends with just a few taps. Its appeal lies in its speed and ease of use.  Today, UPI processes over 18 billion transactions every month in India.

In June alone, it handled over Rs 24.03 lakh crore in payments. This was spread across 18.39 billion transactions. Compared to the same month last year, when there were 13.88 billion transactions, the growth is clear. There is an increase of about 32 per cent in just one year.

The UPI system now serves 491 million individuals and 65 million merchants. It connects 675 banks on a single platform, allowing people to make payments easily without worrying about which bank they use. Today, UPI accounts for 85 per cent of all digital transactions in India. Its impact goes beyond national borders, powering nearly 50 per cent of global real-time digital payments.

As stated in a report by ET Wealth Online, ICICI Bank has reportedly become the first bank to formally establish processing fees regarding the Payment Aggregators (PAs), which deal with UPI payment transactions. Starting August 1, 2025, all UPI transactions will incur a charge.