Digital India UPI Surge: Incentive Dependency Raises Sustainability Questions
The rapid growth of India’s Unified Payments Interface (UPI) and questions whether its expansion is financially sustainable. While UPI has revolutionized digital payments with record transaction volumes and widespread adoption, much of its growth has been supported by government incentives and subsidies for banks and fintech players. The piece highlights concerns that zero merchant discount rates (MDR) and reliance on state-backed incentives may strain public finances and limit long-term viability. Industry experts argue that for UPI to remain sustainable, policymakers may need to rethink revenue models, cost-sharing mechanisms, and private sector participation, ensuring innovation and infrastructure growth without excessive fiscal dependence.




