UPI Pull Payments End October 1, RBI Rules Out Transaction Charges Amid Rising Volumes

From October 1, 2025, a series of regulatory and consumer-related changes will take effect across sectors, with Unified Payments Interface (UPI) transactions witnessing a significant shift. The National Payments Corporation of India (NPCI) has announced the discontinuation of the peer-to-peer “Collect Request” feature, also known as pull transactions, across all UPI platforms including PhonePe, Google Pay, and Paytm.

The move is aimed at enhancing user security and curbing online fraud. “All member banks, payment service providers (PSPs), and UPI apps are directed to implement the necessary changes in their systems and operational processes to ensure that no P2P collect transaction is initiated, routed, or processed beyond October 2, 2025,” NPCI said in a circular signed by Kunal Kalawatia, Chief of Products.

This means users will no longer be able to send a payment request for approval. Instead, payments will need to be initiated directly by the sender, reducing risks of fraudulent requests.

RBI Confirms No Charges on UPI

Amid speculation over the future of UPI’s zero-cost framework, Reserve Bank of India Governor Sanjay Malhotra has categorically stated that there is no proposal to levy charges on UPI transactions. “Are there going to be charges on UPI? Well, there is no proposal before us,” Malhotra said at a press conference following the monetary policy review.

The assurance comes even as UPI usage continues to surge. According to RBI data, transactions crossed 20 billion in August 2025, marking a 34 percent year-on-year increase. Malhotra, however, acknowledged the sustainability challenge: “The important thing is that the UPI, or any other payment system for that matter, is accessible, cheap, secure, and sustainable… and it will be sustainable only if someone bears the costs.”

Fraud Prevention and User Security

The scrapping of the collect request feature highlights the regulator’s focus on protecting consumers. UPI has become the backbone of India’s digital payment ecosystem, but rising fraud cases have pushed NPCI to introduce stricter measures. By shifting fully to push-based transactions, users will have greater control and reduced exposure to scams that exploit payment requests.

Other Regulatory Issues Under Review

The RBI is also examining a proposal to allow banks to remotely lock mobile phones purchased on credit if borrowers default on EMI payments. Deputy Governor M Rajeshwar Rao said both pros and cons are under consideration, especially around balancing customer rights, privacy, and lenders’ requirements.

Meanwhile, the central bank raised India’s GDP growth projection for FY 2025-26 to 6.8 percent, up from 6.5 percent earlier, citing strong activity in the first half of the year.

Other October 1 Changes

Apart from UPI, several other rules are set to impact the public from October 1:

• Railway Ticket Booking: Aadhaar-authenticated users will get a 15-minute priority window to book reserved general tickets on IRCTC platforms.
• National Pension System (NPS): Non-government subscribers can now invest up to 100 percent of their pension corpus in equity-related schemes. Fees for PRAN opening and maintenance have also been revised.
• Online Gaming: New regulations come into effect, introducing age restrictions, licensing, and transparency norms.
• LPG Prices: Prices will be revised as part of the monthly cycle, impacting household budgets.

Looking Ahead

For UPI users, the immediate change is the end of pull-based payments, while the larger debate on funding and sustainability of the system remains open. The RBI has made it clear that no transaction fees are on the table for now, but rising usage volumes and infrastructure costs may reignite the question in the future.

As UPI becomes central to India’s financial system, balancing security, accessibility, and sustainability will be the challenge regulators must navigate.

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