Recently, the Government has announced that UPI payments upto Rs.2000 will remain free. Public fears that UPI payments above Rs.2000 may be chargeable.
Industry estimates suggest that the overall cost of running the UPI ecosystem could be around ₹15,000–₹20,000 crore per year. Based on the huge volume of UPI transactions, this works out to roughly 5–10 paise per transaction as a broad estimate.
Former BharatPe co-founder Ashneer Grover has questioned the cost and subsidy structure of India’s Unified Payments Interface (UPI), while highlighting the large profits earned by banks and the cost of maintaining ATMs and cash logistics.
In a post on social media, Grover said that someone should spend five minutes searching the numbers to understand the scale of the money involved in India’s banking and digital payment system.
RBI Surplus to Government at ₹2.87 Lakh Crore
Grover highlighted an RBI surplus of ₹2.87 lakh crore, equivalent to around US$30 billion, in his post.
He also mentioned that the total listed bank profits stood at ₹4.11 lakh crore, or around US$42 billion.
According to Grover’s post, NPCI, which operates UPI, reported a pre-tax “surplus” of around ₹1,888 crore, equivalent to approximately US$200 million.
Ashneer Grover Questions UPI Subsidy
Grover questioned who is actually suffering losses because of UPI and which subsidy the government is providing for UPI transactions.
He essentially raised the question of whether UPI needs such a subsidy when banks and other parts of the financial system generate significant amounts of revenue and profits.
ATM and Cash Logistics Cost ₹30,500 Crore
Grover also highlighted the cost of India’s traditional cash-based banking infrastructure.
According to the figure mentioned in his post, the cost of running ATMs and cash logistics in India is around ₹30,500 crore, or approximately US$3 billion.
He suggested that if the objective is to optimise costs, banks could reduce the number of ATMs and promote digital payments such as UPI instead.
‘Any Levy on UPI Is Just Tax Collection’
Grover further argued that any levy imposed on UPI would effectively amount to tax collection.
He described UPI as one of India’s major technological achievements and said that it is widely acknowledged internationally. However, he questioned whether the government should impose an additional financial burden on UPI transactions.
