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UPI Pricing Debate: Fee-Free Future Amidst Revenue Woes
26 Aug
Summary
- Consumers will continue to enjoy fee-free UPI transactions.
- Person-to-person payments on UPI will remain free of charge.
- A proposed merchant transaction cap aims to aid payment splitting.
The ongoing discourse on UPI pricing is evolving beyond whether it should remain free, now centering on how to fund a system processing billions of real-time payments without hindering adoption. The government has recently clarified that consumers will not incur transaction charges for using UPI. Furthermore, person-to-person payments via UPI will continue to be entirely free.
A proposed cap on merchant transactions is intended to promote payment splitting. However, this practice, while increasing processing volumes, does not generate the essential revenue required for the system's sustainability. Removing arbitrary thresholds is highlighted as crucial for facilitating broader economic growth.
