Majority of UPI Users May Abandon Service if Transaction Fees Are Imposed, Survey Reveals
A recent survey conducted by LocalCircles has revealed that a significant majority of UPI (Unified Payments Interface) users, around 75%, would stop using the service if transaction fees were introduced. The survey, which gathered responses from over 42,000 individuals across 308 districts, highlighted growing concerns among users regarding the potential imposition of charges on UPI transactions.
According to the findings, 38% of respondents make over half of their payment transactions using UPI, favoring it over other digital payment methods like debit or credit cards. However, only 22% of users expressed a willingness to continue using UPI if a transaction fee were to be applied.
The National Payments Corporation of India (NPCI) reported a record-breaking rise in UPI usage during the 2023-24 fiscal year, with a 57% increase in transaction volume and a 44% rise in transaction value compared to the previous year. For the first time, UPI transactions surpassed 100 billion, reaching a total of 131 billion transactions, up from 84 billion in 2022-23. In terms of value, UPI transactions hit ₹199.89 trillion, compared to ₹139.1 trillion the previous year.
Despite UPI's growing popularity, the survey showed strong opposition to the idea of introducing transaction fees, with 37% of respondents stating that UPI accounts for more than 50% of their total payment value.
LocalCircles has indicated that it will forward the results of this survey to the Ministry of Finance and the Reserve Bank of India (RBI) to ensure the concerns of UPI users are considered before any decision regarding Merchant Discount Rates (MDR) or transaction fees is made. The findings underscore the resistance to any charges on UPI, a service that has rapidly become an essential part of digital payments for millions of consumers in India.
