Archive · 11 Aug 2025
UPI Funding: Debate Over Sustainable Financial Model
UPI, a popular digital payment system, needs funding to keep running.
The RBI is looking at who should pay these costs.
The government initially gave money to support UPI but reduced its support.
The article discusses whether users, merchants, app providers, banks, or the government should fund it.
Banks benefit from increased savings, and the RBI saves on printing money.
Finding a sustainable funding method is crucial to ensure UPI continues to function well and is accessible to everyone.
UPI transactions in June 2025 reached ₹24 lakh crore.
RBI recognizes the need for a sustainable funding model for UPI.
Government incentives for UPI decreased to ₹1,500 crore in FY25.
Banks have benefited from increased savings due to UPI adoption.
Ecosystem players suggest monetization or increased government funding.
- Who
- RBI Governor, ecosystem players, and banks are key stakeholders.
- What
- The need for a sustainable financial model for UPI infrastructure.
- When
- Published on August 7, 2025
- Where
- Not specified
- Why
- To ensure the long-term viability and accessibility of UPI.
Potential Payers
Potential Sources
Cost of UPI
Potential Payers
Consumers should not bear the cost.
Potential Sources
Merchants could cover UPI costs via MDR.
Funding Sources
Potential Payers
Government should continue to fund UPI.
Potential Sources
Banks should shoulder the cost.
- Topic
- UPI Funding
- Key Person
- RBI Governor
- UPI Transactions (June 2025)
- ₹24 lakh crore
- FY25 Government Incentive
- ₹1,500 crore
- RBI Currency Printing Cost (FY25)
- ₹6,373 crore
- ATM Withdrawal CAGR Decline
- 2%
Sources
RBI Governor Clarifies: UPI Not Guaranteed to Remain Free Forever, Costs Must Be Covered
'UPI cannot remain free forever... it isn't free even now': RBI Guv on charging users for UPI
UPI has a cost, someone must bear it, RBI Guv says in post MPC presser
‘Never said users will pay’, RBI Governor on if UPI will remain free
RBI Governor Malhotra Says UPI Model Needs Sustainable Funding
'UPI not free even now, govt subsidising it'
