Sanjay Malhotra emphasizes that consumers bear indirect costs of UPI transactions despite no current plans for merchant fees, as discussions about funding and infrastructure upgrades continue amidst policy tensions.
Reserve Bank of India Governor Sanjay Malhotra said consumers already shoulder the cost of Unified Payments Interface transactions in indirect ways, even though users are not charged at the point of payment. Speaking in Mumbai, Malhotra said it was too early for the central bank to take a position on merchant fees for UPI and stressed that the immediate priority remains improving the payments system itself.
Malhotra’s remarks come as debate grows over how to fund UPI’s expansion. Government proposals have been reported that would allow merchant fees in some cases, including possibly for transactions above ₹2,000, but officials have repeatedly said there is no current plan to levy charges on ordinary users. Business Standard and The Indian Express reported that the government and the finance ministry have sought to calm concerns that free UPI could be at risk.
The governor argued that a payment network that has become a public utility still has real costs, and said the key question is not whether those costs exist but who should bear them. He said the system needs continued investment to support growth and highlighted an ambition of roughly 800 million transactions a day. The comments reflect a broader policy tension: keeping UPI cheap enough to sustain mass adoption while ensuring banks, payment firms and the wider ecosystem have enough revenue to maintain and upgrade the infrastructure.
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