Survey Reveals Strong Resistance to UPI Transaction Fees in India
UPI users resist fees, 75% say they will quit if charged: Report
Business Standard
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A recent LocalCircles survey indicates that 75% of Unified Payments Interface (UPI) users in India would stop using the service if transaction fees are introduced. The survey highlights a growing tension between the rapid adoption of UPI and the need for sustainable revenue models amidst rising operational costs.
- 0175% of UPI users would quit if transaction fees are introduced.
- 02The survey gathered over 39,000 responses across 376 districts.
- 03UPI processed over 240 billion transactions worth ₹314 trillion in FY26.
- 0457% of users reported businesses declining UPI payments in favor of cash.
- 05The banking sector is facing challenges with no revenue from UPI transactions despite high usage.
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A LocalCircles survey reveals that 75% of Unified Payments Interface (UPI) users in India would stop using the service if transaction fees were implemented. The survey, which included over 39,000 responses from 376 districts, highlights the strong resistance among users to any charges on UPI transactions. Currently, UPI dominates India's digital payments landscape, processing over 240 billion transactions valued at ₹314 trillion in the fiscal year 2026. However, concerns are growing regarding the sustainability of the UPI ecosystem, as banks report rising operational costs without corresponding revenue from UPI transactions. The survey also found that 57% of users had encountered situations where businesses declined UPI payments, indicating early signs of friction within the payment system. As UPI enters its second decade, the challenge lies in balancing user adoption with the need for a viable revenue model, as any move to introduce fees may provoke a significant backlash from users.
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The potential introduction of transaction fees could significantly affect user engagement with UPI, which is critical for daily transactions in India. If users abandon UPI, it may lead to a resurgence in cash transactions, impacting digital payment growth.
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