Is UPI & RuPay sustainable?

So seeing this news brought back a worry that I always had… Is UPI & RuPay sustainable?

The reason is that Visa and Mastercard charge a lot of money as transaction fees and make a revenue/profit out of which they run their business.

But UPI and RuPay do not charge as much fees are not that much of a sustainable business, at least not in it’s current form. Especially as PhonePe, Google Pay & Paytm don’t make money out of UPI. They are spending their own money.

Yes. UPI & RuPay charge MDR for transactions above Rs.2000. But the majority of transactions are below Rs.200 and that’s the reason UPI Lite limit was set to Rs.200 before and maybe it’s increasing to Rs.500. But the majority of transactions are nowhere near Rs.2000.

Doesn’t UPI and RuPay need a lot of servers/infrastructure to support the increasing transactions?

Maybe some revolutionary business model is waiting to be found, maybe the MDR will increase.

Do you think that UPI and RuPay will survive?

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UPI is classified as a public service category. I don’t remember where did I read it but it was mentioned when there was a confusion around an announcement around the fees that have to be paid when paying from a wallet. Hence, UPI will sustain.

Rupay is being pushed as an alternative to Visa and Mastercard. Without the no MDR mandate and whip from the RBI event the PSBs were not issuing Rupay variants. Hence, it is the full backing of the government until it has captured the right market share.

Until then, we the consumers; get enjoy the perks of freebies and innovation. And once we have been hooked, bham !! It will all be taken away.


Yes. I also remember reading this in the news.

My worry is that when the government takes it’s hands off UPI and the private companies take over… If they start charging for the UPI services, people will be in a for a shock and there is a possibility that whatever progress was made in digital payments may be erased and people may go back to cash payments.

I remember sometime back, Kotak started charging for UPI payments above a certain limit and RBI stepped in and told them they can’t do that and told to refund the money to the customers.

So it’s only a matter of time till the banks start charging for the service. They have infrastructure cost at the very least.

Kotak is infamous for these stunts.

Well, ownership of UPI will remain with NPCI and as long as RBI continues to set the road map for them, we should be good

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In long term Rupay will start starting MDR, there is no doubt about it.
The only question is when? Maybe, after certain years and capturing decent market size. My guess is that even then MDR charges in Rupay will be lower than the Visa & MasterCard.


There’s no doubt that UPI is sustainable, NPCI is more profitable than many other new age fintech companies.



@saurabh.s My concern is that banks still have to operate their end of infrastructure for UPI to work and they are not making any money as of now.

So NPCI alone making money won’t be enough.

Of course I am not exactly sure how these things work on the backend. If some of our community friends can clarify on that and if there is some scoop on the long term business ideas for UPI, please do share.

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Found this post in the community. Thanks @yagnesh01