Over 70% Users To Stop Using UPI If Transaction Fee Is Levied: Survey

A strong aversion to transaction fees among UPI users in India. The survey found that only 23% of respondents are willing to bear any charges associated with UPI payments, while a staggering 73% would abandon the platform altogether if fees were implemented.

This finding comes amidst ongoing discussions about the potential for introducing transaction charges on UPI payments. In August 2022, the Reserve Bank of India (RBI) proposed a discussion paper exploring this possibility. However, the proposal was met with widespread criticism from the public and various stakeholders, raising concerns about its impact on digital payment adoption and financial inclusion.

The LocalCircles survey further highlights the prevalence of existing convenience fees charged by some platforms and merchants for UPI transactions. Nearly a third (33%) of surveyed users reported encountering these additional charges, indicating a potential disconnect between the intended benefits of UPI and the user experience.

Experts believe that imposing transaction fees on UPI could significantly hinder the growth of digital payments in India. UPI has emerged as a key driver of financial inclusion, enabling seamless and cost-effective cashless transactions for millions of users. Introducing fees could not only discourage existing users but also disproportionately impact low-income individuals who rely heavily on UPI for daily transactions.

The survey findings serve as a strong signal to policymakers and industry stakeholders to prioritize user concerns and explore alternative solutions to ensure the sustainability of the UPI ecosystem. This could involve exploring revenue models outside of transaction fees, such as value-added services or partnerships with financial institutions, while ensuring the continued accessibility and affordability of UPI for all users.