Archive · 20 May 2025
UPI Payments May Become Cheaper Than Credit Cards
Imagine you're buying a toy.
Right now, paying with a credit card might cost the store a little extra, which could mean the toy costs you slightly more.
But using UPI, a way of paying digitally in India, doesn't have this extra cost.
The government is thinking about making UPI even better by making things cheaper if you pay with it!
This means you could pay less for things if you use UPI instead of a credit card, like maybe paying 98 rupees instead of 100 rupees.
This is because credit cards have fees that UPI doesn't.
They will be talking to everyone involved in June to work out the details and possibly make it happen.
UPI transaction volumes surged to 93.23 billion in the second half of 2024.
The government is exploring ways to make UPI cheaper than credit cards.
UPI users could potentially pay less than credit card users for purchases.
Credit cards have a 2-3% merchant discount rate (MDR) not applicable to UPI.
Stakeholder consultations are expected in June with a final blueprint to follow.
- Who
- The Consumer Affairs Ministry is exploring the initiative.
- What
- Plans to make UPI payments cheaper than credit card transactions.
- When
- Consultations are expected in June, with implementation potentially by June 2025.
- Where
- Mumbai, India.
- Why
- To encourage the adoption of UPI and make digital transactions more cost-effective.
- UPI Transaction Volume (H2 2024)
- 93.23 billion
- Year-on-year Growth
- 42%
- Credit Card MDR
- 2-3%
- Potential UPI Price Benefit
- Rs 98 instead of Rs 100 (example)
- Speed increase
- UPI transaction speeds set to double from June 2025