Bengaluru: Around 75 per cent of UPI (Unified Payments Interface) users will discontinue using the system if a transaction fee is introduced, according to a survey by LocalCircles released on Sunday. The survey found that only 22 per cent of UPI users are willing to pay a transaction fee.
The LocalCircles survey collected responses from 42,000 individuals across 308 districts, though the number of responses varied by question.
The survey highlighted that 38 per cent of users currently make more than half of their payments through UPI, opting for it over debit cards, credit cards, or other digital payment methods; 37 per cent of respondents were found to be conducting more than half of their total transaction value through UPI in the last 12 months.
" Consumers believe that if Merchant Discount Rate (MDR) charges are introduced for merchants, they will in turn pass it on to them, just like it happens in the case of credit and debit cards," said the report on the survey findings.
As UPI has become a significant payment method for nearly four out of ten consumers surveyed, there is considerable opposition to the idea of introducing transaction charges.
A total of 15,598 people responded to the question on transaction fees for UPI. Of the total respondents, 44 per cent were from tier 1 cities, 33 per cent from tier 2, and 23 per cent from tier 3, tier 4, and rural districts.
Also, the percentage of UPI users unwilling to pay a transaction fee has marginally increased from 73 per cent to 75 per cent since the last survey in March 2024.
The National Payments Corporation of India (NPCI) saw a 57 per cent growth in transaction volume and a 44 per cent increase in transaction value in the fiscal year 2023-24 compared to the previous year. UPI transactions, for the same fiscal year, surpassed the Rs 10,000 crore mark for the first time, reaching Rs 13,100 crore , up from 8,400 crore in the year-ago period. The total transaction value hit Rs 199.89 lakh crore, compared to Rs 139.1 lakh crore in FY23.
In the first three months of the current fiscal year, UPI transactions have grown over 36 per cent to Rs 66 lakh crore
LocalCircles, in the report, said that it is planning to share the survey findings with the Ministry of Finance and the Reserve Bank of India (RBI) to ensure that user concerns are considered before any decision on merchant discount rate (MDR) charges is made.
The survey was conducted online between July 15 and September 20 this year.