No Plans to Levy Charges on UPI Transaction, Govt Tells Lok Sabha

Minister of State for Finance Pankaj Chaudhary informed the Lok Sabha that there is currently no proposal to impose transaction charges on UPI transfers. He noted that the government has consistently promoted free UPI payments to encourage wider adoption of digital transactions in India.

RBI Governor’s Remarks Triggered Concerns

The clarification follows market speculation after comments made by RBI Governor Sanjay Malhotra at the Financial Express BFSI Summit in Mumbai on July 25, 2025. Malhotra had observed that while UPI being free had yielded “good fruits,” any payment infrastructure also needed financial sustainability.

His remarks were widely read as a hint that users may eventually have to pay charges for UPI transfers. However, during a post monetary policy press conference on August 6, Malhotra clarified that his comments were not meant to signal an immediate policy shift.

Charges for UPI Aggregators, Not End Users

While retail users continue to enjoy free UPI transactions, some banks have started levying nominal fees on payment aggregators. News reports suggest that ICICI Bank, from August 1, 2025, began charging 0.02%–0.04% per transaction (capped at ₹6–₹10). The fee, however, is not applicable if settlements are made directly into ICICI merchant accounts.

Read More: UPI Payments Are Free: How Do Companies Like Google Pay and Paytm Earn?

Conclusion

The government’s latest clarification provides relief to retail users by confirming that UPI transfers remain free of cost for individuals. However, the evolving fee structures for payment aggregators suggest that cost sharing mechanisms within the ecosystem may continue to develop, balancing financial sustainability with the goal of promoting digital payments in India.

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