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UPI has played a major role in promoting digital payments. It is convenient and the biggest thing is that there is no charge for UPI transactions. But if a charge is levied on it, will you continue to use it?

LocalCircles asked this question to thousands of people. About 73% of the people said that if a charge is levied on UPI payments, they will stop using it.

Charges on UPI

Actually, to make UPI transactions sustainable, some stakeholders are advocating charging it. The Payment Council of India (PCI) has written a letter to the Prime Minister demanding the implementation of a 0.3% Merchant Discount Rate (MDR) on UPI transactions. PCI has also recommended the implementation of a fixed MDR structure on RuPay debit cards.

What is MDR?

MDR is the fee that merchants pay to banks or payment processing companies for the payment process. Currently, this charge is not levied on UPI, whereas merchants have to pay this charge on credit card transactions, which they often pass on to customers.

UPI's tremendous growth

UPI transactions have seen an annual growth of 89.3% (in volume) and an annual growth of 86.5% (in value) in the last 5 years.

UPI's share in the digital payment ecosystem was 34% in 2019, which increased to 83% in 2024.

In 2024, there were 208.5 billion digital payment transactions in India, out of which 17,221 crore transactions were done through UPI.

What came out in the survey?

More than 32,000 UPI users from 376 districts participated in the LocalCircles survey. 40% of the users surveyed said that they have been charged for some transaction in the last 12 months. 37% of the users complained about transaction charges, which increased to 40% in 2025.

73% of people said that they would stop using it

Only 25% of people are ready to pay transaction charges.

People's opinion on the format of charging:

73% - There should be no charge on UPI

12% - A fixed charge on every transaction

11% - Fixed charge up to a certain limit and above that charge based on transaction value

2% - Charge based on percentage of transaction

What is the biggest concern of customers?

Experts say that the biggest advantage of UPI is that it does not require an expensive POS machine and transactions can be done with just a QR code. If the government imposes a charge, merchants can pass on this burden to customers, which can affect the growth of digital payments.

The central bank RBI had proposed to impose a charge on UPI in 2022, but the government rejected it, calling it a digital public good. However, RBI's Payments Vision 2025 report suggests a strategy to impose a fee to make digital payments sustainable.

What next?

For crores of Indians using UPI, this remains a big question whether there will be a charge on digital transactions? The government is not giving any clear instructions on this at the moment, but it is being said that a new policy may come on this in the future. LocalCircles is preparing to submit the results of this survey to the Ministry of Finance and RBI.