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The potential introduction of transaction fees on the Unified Payments Interface (UPI) has sparked widespread concern among Indian users, with a recent survey by research agency LocalCircles revealing that a staggering 75% of respondents would abandon the payment system if such charges were implemented. This finding underscores the immense popularity and reliance on UPI as a convenient and cost-effective method for digital transactions in India.
The survey, conducted in September 2024, sampled 15,598 UPI users and found that a substantial majority (75%) expressed their unwillingness to pay transaction fees. Notably, this sentiment has strengthened since a similar survey conducted in March 2024, where 73% of users indicated their aversion to fees. This upward trend signifies a growing resistance among UPI users to the prospect of paying for a service they currently enjoy free of charge.
The widespread adoption of UPI in India has been instrumental in promoting financial inclusion and fostering a cashless society. The system's ease of use and accessibility, coupled with its free-of-charge nature, have made it an integral part of everyday transactions for millions of Indians. However, the potential introduction of fees could undermine these benefits and potentially lead to a decline in UPI usage.
The survey highlights the critical role of UPI in the Indian economy, highlighting its significant impact on various sectors, including business growth, financial inclusion, and the ease of transactions during the COVID-19 pandemic. The report emphasizes that the availability of contactless payment options like BHIM-UPI facilitated social distancing and enabled business transactions during the global health crisis. However, the potential for a decline in UPI usage due to the introduction of fees raises concerns about the potential economic ramifications.
The survey results indicate that a substantial portion of the Indian population heavily relies on UPI for their everyday financial transactions. While the benefits of UPI for both individuals and the economy are undeniable, the potential introduction of transaction fees could have a significant impact on its usage and, subsequently, on the digital payment landscape in India. The survey underscores the need for careful consideration and a thorough evaluation of the potential consequences before implementing such changes.
Source: Three out of four users will stop using UPI payments if transaction fee is introduced: Survey