Free money transfers? Maybe not anymore
here's what's up
Hey there!
This morning, we’re diving into something that might just shake your chai cup — Is free UPI coming to an end?
From zero-cost convenience to potential charges, we break down what’s being discussed, who’s pushing for it, and what it could mean for your daily transactions.
But first, here are some other updates…
📌 Quick Updates
IndiGo Airlines will relocate all flights to Terminals 1 and 3 at Delhi Airport from April 15 due to Terminal 2's scheduled maintenance
Reliance-Shein deal may not benefit Bharat anymore
Delhi's pollution can cause infections in days and cut life expectancy by 10 years, warns Nitin Gadkari
UPI is not free anymore
India's wholesale inflation drops to 2.05% in March, the lowest in four months
📌 Deep Dive
Is free UPI coming to an end? Here’s what’s happeningIndia’s digital payment space has grown massively in the past few years, with UPI leading the way. But now, fintech startups and banks are asking the government to bring back something called the Merchant Discount Rate (MDR).
What is MDR?
It is a small fee that merchants pay when you pay them through digital platforms like UPI.Right now, merchants aren’t charged anything. That’s because, back in 2020, the government made MDR zero to encourage more people and businesses to go digital.
But times have changed.
UPI is no longer a new experiment — it's the main way India pays now. In March 2025 alone, UPI saw 18.3 billion transactions worth ₹24.7 trillion!
So, fintech startups and banks are saying: “We’ve built the tech, handled the traffic, paid for the servers — but we’re not earning from big transactions.”
So, they’ve requested the government to allow charging 0.3% MDR on UPI transactions above ₹2,000, but only for large merchants (those earning more than ₹20 lakh a year).
This way, smaller shops still won’t be affected, and the system can become more sustainable.
Even top players like Razorpay, Groww, Zerodha, and others support this. While Google Pay and PhonePe (who control over 80% of UPI traffic) are staying quiet, experts say it won’t hurt them — most of their transactions are below ₹2,000 anyway.
But why is free UPI not sustainable? Banks are rich, right?
Making UPI free came at a cost. The government used to pay banks and payment companies a small reward (around 0.15% per transaction) to keep things running. But over the years, this support has shrunk massively — from ₹3,631 crore in FY24 to a projected ₹437 crore in FY26.
Meanwhile, the cost of running these systems has shot up. Banks, fintechs, and payment providers are spending more to handle high volumes, tech upgrades, and even outages. They say this is no longer sustainable without earning something in return.
Some players have secretly been charging “convenience fees” or nudging users towards credit cards just to make money. But that’s not ideal.
The idea now is: let’s keep UPI free for small users, but charge big merchants for high-value transactions — just like any other business service. This will help make the ecosystem fairer and allow more players to grow.
Experts believe this won’t affect UPI usage.
People and merchants go where the convenience is. A small fee won’t push anyone back to cash — but it will make the backend much healthier.
📌 Market Updates
Bharti Airtel shares jumped over 3%, reaching a new 52-week high after partnering with Blinkit
Sensex soars 1,750 Points, Nifty 50 climbs 2%
Reliance share price soars 3%
So, that’s it for today. If you enjoyed this edition, subscribe to hear from us every day!
See ya 👋
