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This is exactly why banks are unhappy - they have to bear the infra cost. This is also the reason the government is trying to push UPI wallet. I suspect at some future point UPI (non-wallet) transactions will be charged a small fee and wallet transactions will not.

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Banks are in general happy as any cost is offset by reduction in cash handling cot. ATMs installation and maintenance are costly, branches even more so, you can reduce that. Also, for the merchants, cash handling cost is greater than 0.

> I suspect at some future point UPI (non-wallet) transactions will be charged a small fee and wallet transactions will not.

Right now, it is other way round. Wallet transactions above ₹2000 attract some fees for merchants.

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