A few days back, I was headed out to buy some vegetables. When I reached the shop, I realized I had forgotten my wallet.

The owner of the shop unlocked his phone. Opened Google Pay. Displayed his QR code for me to scan. And in 5 seconds, the transaction was complete.

That’s the power of UPI. It’s easy. It’s fast. And, it’s FREE.

But nothing is really free. When you study economics & finance, you understand that there are no free lunches, only the illusion of it.

It costs money to maintain the UPI payments infrastructure. To process transactions. To record information.

Who pays for UPI?

The Government [through NPCI]

And who pays the Government?

The taxpayer, who isn’t really aware how his money is being used.

So, the Finance Ministry can come out & earn brownie points when they say that UPI is going to be free for everyone.

But sooner or later as UPI gains even more traction, the Government will be faced with a simple question [that RBI wants them to ponder over]

‘Is it sustainable to keep UPI transactions free forever?’