Around 75% of UPI users in India may stop using the platform if transaction fees are introduced, according to a new survey, signalling a risk to the country's fast-growing digital payments system.
The finding shows how strongly users value free payments, even as UPI moves closer to handling one billion transactions a day.
The survey by LocalCircles found only 25% of users would continue using UPI if charges were imposed. It said resistance to fees has increased from 2025, when 73% of respondents were against transaction charges.
UPI, launched in 2016, has become a core part of daily spending in India, from bill sharing to small retail purchases. Any change in its zero-cost model could affect payment habits, merchant acceptance and the wider shift away from cash.
User Response
The survey, titled UPI@10, said even small charges could sharply change consumer behaviour. "Even a nominal transaction charge risks triggering disproportionate behavioural shifts. In a high-frequency, low-ticket ecosystem like UPI, price sensitivity is extreme, and friction, even in basis points, can push users back toward cash," it noted.
The report also highlighted merchant resistance. About 57% of users said they faced at least one case in the past year where a business refused UPI and asked for cash instead. Nearly 19% said such refusals happened frequently.
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Growth Path
UPI continues to expand across India at scale. The government has set a target of one billion transactions a day, and the platform is moving closer to that level.
In March 2026, UPI processed around 800 million daily transactions. Total transaction value during the month nearly reached Rs 30 lakh trillion, underlining the size of the network.
Policy Shift
Debate over possible charges has intensified after a parliamentary committee suggested bringing back the Merchant Discount Rate, or MDR, on UPI. The panel said long-term growth of the platform needs a sustainable revenue model.
MDR is a fee merchants pay banks for processing transactions. It was removed in 2020 to support affordable digital payments. Many users now fear any restored charge could eventually be passed on to them.
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