UPI Charges- Will UPI service remain free forever? The RBI governor also commented on this while talking to journalists after the announcement of MPC decisions on Wednesday. He feared that UPI cannot remain free forever, because someone will have to bear the cost of running the digital payment system over time.
After the announcement of MPC’s decisions, the RBI governor clarified, “I never said that UPI will always be free. I only said that there are expenses associated with its operation, and someone will have to bear this expense. Who will pay is important, but who is paying is not more important than that.
Therefore, it is important for us that for the stability of this model, someone collectively or individually pays for its operation.” Malhotra’s statement has come at a time when some reports are coming out about the charges being levied on the UPI ecosystem. Some media reports have claimed that ICICI Bank will be the first bank in the country to formally charge its payment aggregators for UPI payments from August 1, 2025. However, the bank has not given any official information about this yet. Sources have claimed that ICICI Bank had informed its payment aggregators about the new fee structure in late June.
Sources have claimed that the bank is charging 2 basis points (2 paise per transaction of Rs 100) as a charge from its payment aggregators operating escrow accounts. Its maximum limit has been set at Rs 6 per transaction. At the same time, 4 basis points and a maximum of Rs 10 are being charged from payment aggregators operating non-escrow accounts. However, there are reports of no charge being levied on transactions through ICICI Bank’s merchant accounts. However, at present, no charge is being levied on customers and businessmen.
Earlier in July, while speaking on the issue of charging for UPI during the BFSI Summit, RBI Governor Malhotra had said that free UPI is not sustainable for a long time. It is an important infrastructure. The government believes that this facility should be available for free and it is giving subsidy for it. Speaking about digital payments, the RBI Governor had said that in my view it has shown good results. According to RBI data, in the month of June alone, 18.4 billion UPI transactions took place and it registered a growth of 32 percent on an annual basis.
The RBI Governor said, “The important thing is that UPI, or any other payment system, is accessible, affordable, secure and sustainable… and it will be sustainable only if someone bears the cost. So whether it is the government or someone else – it is not so important – the important thing is that the cost of any service should be paid, whether collectively or on behalf of the user.” The RBI Governor admitted that the current system is completely dependent on subsidy from the government. There is no direct cost burden on banks and other stakeholders for such a large scale of transactions.