RBI has funds to pay for UPI platform without having to charge merchants, customers
RBI Governor Sanjay Malhotra stated that the costs of UPI transactions must be covered, amid government moves to potentially allow merchant charges. An analysis suggests the RBI has sufficient surplus funds to cover these costs without charging users.
Why it matters
The debate over UPI transaction fees impacts the accessibility of digital payments for millions of users and small businesses in India.
Reserve Bank of India Governor Sanjay Malhotra on Wednesday (August 5, 2026) said that “someone will have to pay the cost” of UPI transactions, which are currently free for merchants and customers. The cost is currently being borne by banks and the National Payment Corporation of India.
Mr. Malhotra was responding to media queries in the context of recent moves by the government to pave the way for a charge to be levied on such transactions. If implemented, certain merchants would have to pay banks for the use of the UPI platform, which experts say they would pass on to customers.
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