World · India Bureau
RBI Chief Says UPI Fee Will Not Dent Transaction Growth
Reserve Bank of India Governor Sanjay Malhoria has dismissed concerns that a modest merchant discount rate on certain UPI payments will significantly suppress transaction volumes as the new levy comes into effect from mid-October.
LSN India ·
The RBI Governor's statement comes as the central bank prepares to implement charges on select UPI transactions from October 15, marking the first time a fee structure has been introduced on the digital payment platform. Malhotra expressed confidence that the modest charge would not materially impact user behaviour or transaction growth on the increasingly popular platform.
The MDR implementation is part of the RBI's broader efforts to improve the financial sustainability of the UPI ecosystem while ensuring fair cost distribution among participants. The charge applies to specific categories of UPI payments rather than all transactions, a measured approach designed to minimise disruption to users and merchants.
UPI has emerged as India's dominant retail digital payments platform, recording unprecedented growth in transaction volumes over the past two years. The platform processed billions of transactions monthly before the fee announcement, demonstrating deep user adoption across urban and semi-urban markets.
The RBI's assertion that the fee impact will be limited reflects confidence in the resilience of India's digital payments infrastructure and user acceptance of the platform's value proposition. Industry observers are closely watching transaction data following the October 15 implementation date to assess whether the Governor's assessment proves accurate.