In India, UPI (Unified Payments Interface) has become a vital part of everyday transactions. From small tea stalls to supermarkets, UPI payments are accepted almost everywhere. The convenience it offers is largely due to two factors: easy access to the internet and, importantly, the fact that there are no additional transaction fees for users. But what would happen if the government started charging for UPI transactions? This question has sparked much debate, and a recent survey offers some shocking insights into how users would react if UPI became a paid service.
Survey Reveals Strong Opposition to UPI Fees
According to a survey conducted by LocalCircles, 75% of UPI users would stop using the service if transaction fees were introduced. The survey, which gathered 42,000 responses from 308 districts across India, found that most people are unwilling to pay any kind of charges for UPI transactions. Only 22% of respondents said they would be willing to bear the cost if fees were imposed, while the majority stated that they would switch to other forms of payment.
UPI’s Role in Digital Payments
The survey highlights the significant role UPI plays in India’s digital payment landscape. Around 38% of respondents said they make 50% of their digital payments through UPI rather than using debit or credit cards. This data reflects the increasing reliance on UPI for both small and large transactions. The findings suggest that UPI has not only made digital payments more accessible but has also become a preferred mode of payment for millions of users across the country.
Massive Growth in UPI Transactions
The growing importance of UPI is backed by impressive numbers. According to data from the National Payments Corporation of India (NPCI), UPI saw a record 57% increase in transaction volume and a 44% rise in transaction value in the financial year 2023-24 compared to the previous year. For the first time, UPI transactions crossed the 100 billion mark, reaching 131 billion transactions in 2023-24, up from 84 billion in 2022-23.
In terms of value, the total UPI transaction value jumped from Rs 1,39,100 billion in 2022-23 to Rs 1,99,890 billion in 2023-24, indicating how quickly the platform is gaining ground. With 37% of survey respondents stating that UPI accounts for over half of their total payments in terms of value, it is clear that UPI is becoming a crucial part of India’s financial ecosystem.
UPI’s Growing Necessity and Resistance to Fees
The survey also underscores how UPI is becoming an essential payment tool for consumers. Four out of 10 respondents mentioned that UPI has become a necessity in their daily lives. The convenience of quick, fee-free payments has turned UPI into a vital service, especially for small businesses and consumers. However, the possibility of introducing fees could disrupt this growing trend, as the survey indicates strong resistance to any form of transaction charges.
Given the widespread opposition, LocalCircles plans to share the survey results with the Ministry of Finance and the Reserve Bank of India (RBI). This move is aimed at ensuring the government takes into account the views of UPI users before considering any fees, including Merchant Discount Rate (MDR) charges.
In conclusion, the survey clearly shows that while UPI has become a key part of India’s digital payment revolution, the introduction of any transaction fees could lead to a massive drop in its usage. The government will need to carefully weigh the benefits of charging for UPI against the potential backlash from users who have grown accustomed to the service being free.
