UPI (Unified Payment Interface), which has become the most popular medium of digital payment in the country, is now surrounded by questions: Will this service always be free? The statement given by Reserve Bank of India (RBI) Governor Sanjay Malhotra on this may surprise many people.
RBI Governor’s statement
In a press conference after the Monetary Policy Committee (MPC) meeting, Governor Sanjay Malhotra clearly said: “I never said that UPI will always be free. There are costs associated with this service and someone will pay it.” He also added that to make a digital payment system like UPI sustainable, its cost will have to be borne by someone—be it the government, banks, merchants or consumers.
Question on Zero-Cost Model
The governor had earlier also expressed concern that the Zero-Cost Model of UPI cannot last for a long time. At present, the government is subsidizing this service, due to which there is no direct cost to banks and companies. But as the number of transactions is increasing, the cost is also increasing.
ICICI Bank started charging
Meanwhile, an important news is that ICICI Bank has started charging processing fees on UPI transactions. Payment aggregators are being charged from 2 to 4 basis points depending on the transaction, with a maximum limit of ₹ 6 to ₹ 10 per transaction.
Increasing influence of UPI
According to data from the National Payments Corporation of India (NPCI), UPI transactions reached a record level of 19.47 billion in July 2025, with a total value of ₹ 25.08 lakh crore.