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UPI's Zero-Fee Model Faces Sustainability Questions as Costs Mount

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India's Unified Payments Interface (UPI) revolutionized digital transactions by offering completely free payments, enabling mass adoption across the country. The platform's success has been built on its zero-charge model, particularly for small-value transactions. However, the infrastructure supporting billions of UPI transactions comes at a significant financial cost, estimated in the tens of thousands of crores of rupees. This raises a pressing question about how long the free UPI model can remain financially viable for banks and payment service providers. Stakeholders are now debating whether a fee structure may eventually need to be introduced to sustain the system.

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UPI's Zero-Fee Model Faces Sustainability Questions as Costs Mount · ShortSingh