New Delhi, September 27, 2026 (Yes Punjab News)
India’s Unified Payments Interface (UPI) has emerged as the world’s largest retail fast-payment system by transaction volume, while its rapid expansion has brought sustainability and cost recovery into focus, according to an IMF report and an analysis published by the South China Morning Post.
UPI, operated by the National Payments Corporation of India (NPCI), has played a major role in India’s digital payments transformation and helped bring large sections of the population into the formal economy.
Government data shows that annual UPI transaction volume rose to 241.62 billion in the financial year ended March 2026, compared with 17.8 million in 2016-17. Transaction value also increased from Rs 7,000 crore to Rs 3.14 lakh crore over the same period.
A decade after UPI was launched, the growing scale of the network has prompted discussions around charging some merchants to help recover the costs incurred by banks and payment companies in maintaining the system.
The South China Morning Post article said a predictable revenue stream could encourage banks and payment companies to invest further in cybersecurity, fraud detection and dispute resolution, while supporting the next phase of UPI’s development, including credit lines and expanded cross-border transfers.
The article cited an expert as saying several countries in Asia and the Global South had studied UPI because it demonstrated how a large payment system could be scaled without relying on international card networks.
Rohit Arora, co-founder and CEO of fintech firm Biz2Credit, was also quoted as saying that some degree of cost recovery from merchants was inevitable after years of free usage.
UPI is now operational across 11 countries, including Singapore, the UAE, France, Mauritius, Nepal, Bhutan, Qatar, Sri Lanka, Cambodia, Greece and Uzbekistan. Indian tourists, business travellers and students can make direct person-to-merchant payments from Indian bank accounts in these markets, reducing dependence on international cards and cash.
The experience of other digital payment systems also offers possible models. Indonesia has rate structures based on merchant category and transaction size, while Malaysia’s DuitNow merchant charges vary by bank or payment provider, with some waivers available.
The broader issue remains the cost of operating secure digital payment networks, with the article noting that countries developing such systems face similar questions around long-term sustainability and funding.
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