What happened

RBI Governor Sanjay Malhotra said that if charges are introduced for UPI transactions—UPI transactions are described as currently free for merchants and customers—then someone must bear the cost of charging and the cost of operating the UPI payment platform. Malhotra indicated that merchants could end up paying banks for using the payment platform, and that any bank charges could be passed on to customers.

The news account also links the UPI charging cost debate to RBI’s financial capacity. It claims that RBI’s annual surplus transfers to the Union government have grown faster than the measured share of transaction costs as UPI transaction volumes expanded over several years. The story provides estimated per-transaction operating and maintenance costs and ties the estimated total cost to the share of RBI surplus transfers using official UPI transaction volume figures for 2025–26.

Background and earlier position

UPI transactions are described as free for merchants and customers in the point of payment acceptance context discussed in the news account. In payment pricing discussions, Merchant Discount Rate (MDR) is used as a benchmark from card payments, where merchants typically bear acceptance and processing charges. The UPI charging debate therefore focuses on whether operating and maintenance costs for the UPI platform should be recovered through merchant/customer charges or through institutional funding linked to RBI’s financial capacity and its annual surplus transfers to the Union government.

What changed now

Related current affairs