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Reserve Bank of India (RBI) Governor Sanjay Malhotra recently said that the service of UPI (Unified Payment Interface) cannot always be free. He clearly said that there is a cost involved in running this digital payment system, and someone will have to bear this cost.

The RBI Governor made this statement in a press conference after the Monetary Policy Committee (MPC) meeting. He said, "I never said that UPI will always be free. There are costs associated with this service, and someone will pay for it."

Who will bear the burden of UPI's cost?
The governor further said that the most important thing is that this system has to be made sustainable. Whether the payment is made by the government or someone else, it does not matter. But the cost of this service cannot be covered without payment for a long time. He said that any service is sustainable only when its cost is covered, whether it is a person, merchant, bank, or government.

Will the zero-cost model not work for long?
The RBI Governor had earlier also expressed concern on this issue. At the Financial Express BFSI Summit in July 2025, he said that the Zero-Cost Model of UPI cannot last long. He said that right now the government is subsidizing this service, due to which there is no direct cost to banks and other companies, but as the number of transactions is increasing, the cost is also increasing.

The UPI model is changing, and ICICI Bank took the first step

Meanwhile, big news has also come that ICICI Bank has started charging a processing fee on UPI transactions. According to a report by ET, ICICI Bank will now charge payment aggregators (PAs) on the basis of transaction. If the PA has an escrow account in ICICI, then up to 2 basis points (₹0.02 on ₹100) will be charged. Maximum ₹6 per transaction. PAs who do not have an escrow account in ICICI will be charged up to 4 basis points. Maximum ₹10 per transaction. If the merchant has an account with ICICI Bank and the transaction is done from the same, there will be no charges.

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