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Promoting Low Value UPI Transactions: The Reserve Bank of India has decided to make the country’s most popular digital payment platform UPI more sustainable for the future. RBI Governor Sanjay Malhotra on Friday said important changes will be made in the technical framework to strengthen the UPI ecosystem. This step has been taken with the aim of enhancing the reliability of the digital payment system and handling the increasing transaction pressure. The government is investing heavily in the budget to promote low-value UPI transactions so that the economy remains booming.

improvement in technical infrastructure

RBI Governor Sanjay Malhotra, while speaking to the media after the February monetary policy announcement, stressed the importance of UPI. He clarified that UPI is a unique system for India which will be further improved in the coming years. Strengthening the stability, speed and security of the system has now become the need of the hour as the number of users is increasing.

increasing customer confidence

These improvements in infrastructure will greatly help customers in overcoming technical difficulties faced during transactions. Without strong infrastructure, running such a large digital ecosystem smoothly may prove to be very difficult in the future. The main focus of RBI has now become to make UPI more secure and sustainable in the long run than ever before.

Free Service and MDR

At present UPI is almost free for the general public and merchants and banks cover its expenses through the government budget. However, payment companies have been demanding for a long time to impose Merchant Discount Rate (MDR) so that they can become self-reliant. Considering the sensitivity of about 50 crore users, the government has decided not to accept this demand for now.

Budget and Incentives

In the Union Budget 2026-27, the government has earmarked Rs 2,000 crore to promote UPI and RuPay debit card transactions. This incentive amount is mainly distributed among banks and third party apps to speed up digital payments. Although this allocated amount is slightly less than the revised estimate of the last financial year, it is still quite significant.

New transaction record

According to the information given in the Parliament recently, till December in the current financial year, transactions worth Rs 230 lakh crore were done through UPI. Such huge figures prove that UPI has now truly become the strong backbone of the Indian digital economy. The penetration of digital payments in every corner of the country has reduced the dependence on cash transactions to a great extent.

future challenges

As the transaction pressure on UPI is increasing, it has become necessary to further strengthen the security of the system. Due to improvement in technical infrastructure, it is expected that the cases of cyber fraud will reduce significantly in future. RBI aims to provide a transparent and fast digital platform that every Indian citizen can trust.