Nearly three in four users would stop using the widely-used Unified Payments Interface (UPI) in India if transaction fees were introduced, a LocalCircles survey showed.
User responses to the fee question were explicit in their promised rejection. As per the survey, 75 per cent of respondents said: “There should be no charge on UPI transactions and I will stop using if a charge is introduced”, while only 25 per cent were willing to pay for use.
Even among those open to charges, preferences varied across fixed fees, percentage-based pricing, or hybrid models. According to the survey, responses showed no clear preference for any single fee structure.
The findings were based on over 39,000 responses across 376 districts, making it one of the largest consumer sentiment snapshots on UPI pricing so far.
The pushback came even as UPI continued to dominate India’s digital payments landscape.
The platform processed over 240 billion transactions in FY26, with values exceeding ₹314 trillion.
However, industry experts have flagged structural concerns. A decade after launch, limited incentives and the absence of a merchant discount rate (MDR) on UPI transactions have begun to constrain the ecosystem’s growth, Business Standard reported earlier.
The sustainability debate has also been building within the banking system.
Axis Bank MD Amitabh Chaudhry had earlier told Business Standard that banks “earn nothing” from UPI transactions despite bearing infrastructure costs, which showcases the imbalance between usage growth and revenue generation.
With transaction volumes surging but revenue streams limited, stakeholders have increasingly questioned how the system can remain viable without introducing some form of monetisation.
The LocalCircles survey pointed to early stress points on the ground.
It found that 57 per cent of users had experienced at least one instance in the past year where a business declined UPI payments and insisted on cash, while 19 per cent said this happened frequently.
This suggested that even before any formal fee introduction, parts of the ecosystem, particularly small merchants, may already be pushing back.
The findings captured a widening disconnect. On one side, UPI had scaled rapidly on the promise of free, seamless transactions. On the other hand, the cost of maintaining and expanding the infrastructure continued to rise, with banks and payment players seeking viable revenue models.
“The findings highlight a clear and critical reality: while adoption is universal, willingness to pay is not,” the survey said.
As UPI entered its second decade, the question was no longer about scale, but sustainability.
According to the survey, any move to introduce fees risked triggering a user backlash, while keeping the system free strained the economics for participants, leaving policymakers to navigate a narrow path between growth and viability.
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