The number of digital financial transactions in the country is steadily increasing, with consumers utilizing UPI for everything from flight tickets to vegetable purchases. UPI has gained popularity for its ease and security; however, discussions are now underway about imposing tariffs on these transactions. UPI service providers have already begun charging fees on mobile recharges, leading to concerns that other transactions may soon be affected. In light of this, 'Local Circle' conducted a survey on customer reactions to the potential UPI transaction fees, revealing some surprising insights.
Majority of Users May Abandon UPI Over Transaction FeesA survey conducted by Local Circle revealed that 75 percent of users would discontinue the UPI service if transaction fees are implemented. The findings indicate that 38 percent of users rely on UPI for 50 percent of their payment transactions, opting for it over debit and credit cards or other digital methods. Notably, only 22 percent of UPI users are willing to accept additional transaction fees. The survey gathered insights from 42,000 UPI users across 308 districts nationwide, highlighting varied responses to each question posed.
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UPI Transaction Volume Soars by 57%In response to questions regarding transaction fees on UPI, Local Circle received 15,598 responses. The National Payments Corporation of India (NPCI) reported a remarkable 57 percent increase in transaction volume and a 44 percent rise in value for the financial year 2023-24 compared to the previous year. Notably, UPI transactions surpassed the 100 billion mark for the first time, totaling Rs 131 billion in 2023-24, up from Rs 84 billion in 2022-23. The overall transaction value also surged from Rs 139,100 billion to Rs 199,890 billion, according to the report.
UPI Becoming Essential for Many UsersThe survey revealed that 37 percent of users conduct 50 percent of their total transactions via UPI. This highlights that UPI is becoming an integral payment method for 4 out of 10 customers, leading to strong opposition against any direct or indirect charges on UPI transactions. Local Circles plans to present the survey results to the Finance Ministry and the Reserve Bank of India (RBI) to ensure UPI users' opinions are considered before implementing any MDR fees. The survey was conducted online from July 15 to September 20.