Today in India, UPI is not just a payment system but has become a part of our everyday life. From tea vendors to big malls, the same voice is heard everywhere – “UPI hai na!” This biggest success of Digital India has almost left cash and cards behind. But behind this shining success story lies a big and serious question – can UPI always remain free? The truth is that it costs about ₹ 2 to process every UPI transaction, which is currently being borne by the banks and fintech companies themselves. No fees are charged from merchants, which increased adoption, but made the system no longer financially sustainable. Government incentives are also continuously decreasing. While there was support of ₹3,900 crore in FY24, now it has reduced to just ₹427 crore. RBI Governor has also clearly said that UPI cannot remain free always. The irony is that despite record usage, there is lack of money to run the system. Industry suggests – UPI should be free for small merchants, but controlled charges should be imposed on big merchants. Now everyone’s eyes are on Union Budget 2026. If a solution is not found, the growth of UPI may slow down.
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