UPI Fees Could Ignite Inflation and Push Merchants Back to Cash, Warns Kerala Textile Body

The Kerala Textile & Garments Association (KTGA) on [date] warned that proposed charges on Unified Payments Interface (UPI) transactions could fuel inflation and drive merchants back to cash. KTGA State president Pattabhiraman T.S. said UPI has evolved into essential public digital infrastructure, generating significant benefits for governments, banks, payment platforms, and the wider economy.

Pattabhiraman's statement comes amid ongoing debates over the sustainability of UPI's zero-fee model, which has been pivotal in India's digital payments surge. UPI processes billions of transactions monthly, but banks and payment platforms have long argued for a revenue model to cover operational costs. The KTGA's warning highlights concerns that any new charges would disproportionately affect small merchants and consumers, potentially reversing the shift away from cash.

If UPI charges are implemented, they could lead to higher prices for goods and services, contributing to inflation, and may push small businesses back to cash transactions, undermining digital India initiatives. The KTGA's stance adds to the growing chorus of voices urging the government and regulators to maintain UPI as a free public good. Next steps may involve further consultations with stakeholders before any policy decision is made.