Big Update! UPI Will Be No More Free

Governor of the Reserve Bank of India (RBI), Sanjay Malhotra sent shocks through the nation. He added by saying that UPI payments might not remain free forever. After hearing him, millions of Indians are worried and anxious about what lies ahead for Digital India’s most used payment system.

UPI Is Free But At What Cost?

UPI transactions are free for users. No matter the amount, You’re not charged a paisa. But according to the RBI governor, this “Free” model is currently running on government subsidies. These subsidies help banks and payment service providers cover the rising costs of maintaining the complex digital payment infrastructure behind the scenes.

RBI’s Candid Statement:

Malhotra, in one of its recent events in Mumbai, said, “Costs will have to be borne; someone has to pay.” He said no service, especially one handling billions of transactions monthly, can remain completely free forever. This statement hints at the possible return of Merchant Discount Rates (MDR). Merchant Discount Rate (MDR) is a charge that merchants used to pay but was abolished in 2019 to boost UPI adoption.

(June 2025) last month, UPI set a global benchmark by processing 18.39 billion transactions with a total value of Rs 24.03 lakh crore. UPI has even overtaken global giants like Visa in terms of volume. Even behind this success, there’s an increasing worry: Can UPI continue to operate sustainably without charging users or merchants?

Future possibility of UPI:

The RBI hasn’t yet clarified who will eventually bear the cost: users or merchants. But one thing is becoming more certain: the era of completely free UPI payments may be nearing its end. India’s digital payments are on the verge of a major transformation.