The Reserve Bank of India (RBI) has reaffirmed that Unified Payments Interface (UPI) will continue to remain free of charges for users, as announced by RBI Governor Sanjay Malhotra during the post-policy presser on Wednesday. The statement reinforces the government and the central bank’s ongoing efforts to promote digital payments adoption across India. The announcement had an immediate impact on the stock market, with Paytm (One 97 Communications) shares rising over 2 percent in early trading sessions.
Addressing concerns about potential charges on UPI transactions, Governor Malhotra clarified that there are no current proposals to levy fees on UPI payments. He emphasized that UPI will continue to remain a zero-cost platform for users under the present policy, signaling that the government and RBI remain committed to maintaining accessibility and affordability in India’s digital payments ecosystem.
The statement comes amid discussions around the sustainability of UPI’s free model, highlighting the central bank’s intent to balance financial inclusion with operational sustainability. By keeping UPI transactions free, the RBI aims to encourage wider usage and facilitate a seamless payment experience for millions of users across the country.
UPI has emerged as one of the most widely used real-time payment systems in India. With transaction volumes continuing to reach record highs, India has cemented its position as the world’s largest real-time payments market. The platform’s zero-cost model has been a key driver in its widespread adoption, making digital payments accessible to all segments of society.
Governor Malhotra’s confirmation that UPI will remain free reinforces the commitment to maintaining this growth trajectory. The announcement is expected to sustain confidence among both users and fintech companies that rely heavily on UPI for their payment infrastructure.
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Following the announcement, shares of Paytm (One 97 Communications) witnessed a sharp reaction in the stock market. The share price jumped over 2 percent, trading at ₹1,147 on the NSE in the early afternoon session. Investors welcomed the RBI’s confirmation, which ensures that the digital payments ecosystem remains conducive to growth and innovation without sudden disruptions.
Paytm, being one of the leading fintech companies in India and a major player in UPI transactions, benefits directly from the assurance that transaction charges will not be introduced. The positive market sentiment reflects investor confidence in the stability and continued expansion of digital payments in India.
The RBI Governor’s statement also comes amid renewed speculation about the long-term sustainability of UPI’s zero-cost model. In past statements, Malhotra had noted that “there are costs associated with UPI transactions, and they need to be paid for by someone.” He had acknowledged that UPI may not remain free indefinitely.
However, in Wednesday’s presser, he clarified that no changes are being introduced at present, putting to rest immediate concerns about the introduction of transaction fees. This distinction is important, as fintech companies and users alike have been evaluating potential impacts on adoption, pricing, and profitability in the event of any fee implementation.
UPI has transformed India’s payments landscape, enabling millions of users to transfer money instantly across banks and platforms. The system supports seamless transactions for both retail consumers and businesses, contributing significantly to financial inclusion and cashless payments adoption.
The continued zero-cost model plays a critical role in ensuring that digital payments remain affordable, especially for small businesses, merchants, and low-income users. By keeping UPI free, the RBI encourages widespread participation and reinforces trust in digital payment mechanisms.
The RBI and government’s stance on maintaining UPI as a free platform aligns with broader financial policy objectives. Promoting digital payments adoption is a key component of India’s vision for a cashless economy, while ensuring equitable access for all users. The zero-cost structure has been instrumental in achieving the rapid scale of UPI transactions observed today.
Governor Malhotra’s reaffirmation signals that while the costs of operating UPI exist, the central bank is currently absorbing or managing them in a way that does not impact end users. This approach helps maintain user confidence and avoids disruption in one of India’s fastest-growing payment channels.
For fintech companies such as Paytm, PhonePe, and Google Pay, the announcement provides clarity and stability. These companies rely heavily on UPI for facilitating payments and generating transaction volumes. Any introduction of charges could have altered business models and user behavior, potentially affecting adoption rates.
By confirming the continuation of zero-cost UPI transactions, the RBI ensures that fintech companies can continue operating within predictable parameters. This clarity is likely to encourage further investments, partnerships, and innovations in India’s digital payments sector.
The market response to the RBI Governor’s statement indicates strong investor confidence in the stability of UPI and the fintech ecosystem. The rise in Paytm’s share price reflects optimism about continued growth, adoption, and transaction volumes in the digital payments space.
As UPI continues to scale, the platform’s role in supporting India’s transition to a digital economy becomes increasingly critical. Maintaining zero-cost transactions ensures that the benefits of digital payments are widely accessible, reinforcing India’s position as a global leader in real-time payment systems.
RBI Governor Sanjay Malhotra has confirmed that UPI transactions will remain free of any charges under the current policy, addressing concerns about potential fees in the future. The announcement reinforces the government and RBI’s commitment to promoting digital payments adoption and ensuring that UPI remains a zero-cost platform for users across India.
The statement had an immediate positive impact on the stock market, with Paytm shares rising over 2 percent shortly after the announcement, trading at ₹1,147 on the NSE. While UPI’s zero-cost model has been questioned in the past regarding its sustainability, Governor Malhotra emphasized that no changes are being implemented now, providing stability and confidence to users and fintech companies alike.
UPI continues to scale record volumes, cementing India’s position as the largest real-time payments market in the world. By keeping UPI free, the RBI ensures that digital payments remain accessible, affordable, and widely adopted, supporting India’s ongoing transition toward a cashless economy. The announcement is a positive signal for both investors and users, confirming that the digital payments ecosystem in India is set to grow steadily while remaining user-friendly and cost-free.
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