PhonePe, Google Pay transactions won't be the same anymore, huge change coming up in UPI services, RBI clarifies

NEW DELHI: RBI Governor Sanjay Malhotra has indicated that UPI services like PhonePe and Google Pay may soon charge users for transactions, ending their free service model. He stated that carrying out UPI transactions incurs costs, and someone has to bear them.

"A sustainable funding model is required for UPI transactions. For UPI to continue in the long run, its costs must be borne either collectively or individually," Malhotra said.

UPI, India’s digital payment system, had earlier surpassed Visa to become the global leader. While 85% of digital payments in India are made via UPI, globally, UPI accounts for 60% of all digital payments. According to an IMF report, over 640 million UPI transactions take place daily in India.

In June 2025 alone, UPI transactions crossed 18.39 billion (over 1,800 crore), amounting to Rs 24 lakh crore in transfers. During the same period last year, 13.88 billion transactions were recorded. This year’s transactions have seen a 32% increase compared to the previous year. Earlier reports had suggested that the free UPI service might be discontinued. It is amid this context that Malhotra’s clarification has emerged.