How Do UPI Applications Make Money: The Secret Sauce

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In case you are a college-going student based out of India, you might be already aware of UPI, also referred to as Unified Payments Interface, which is an online payment system that lets you send and receive funds instantly in just a few clicks directly from your bank account with the help of just your mobile phone or even a digital payment address. 

Hence, UPI payment has facilitated transferring and receiving funds as easily as possible. But are you aware of how these UPI applications generate revenue? They do not charge you anything when you merely use their services. 

Also, they may occasionally reward you through discounts, cashback, and rewards for conducting transactions via their apps. So, how exactly do they make money and keep their business functioning? 

In this guide, you will become familiar with the key sources due to which a UPI app makes money from numerous sources and provide a wide variety of value-added services for its users and merchants. 

UPI’s payment segment needs to constantly inculcate the process of innovation, diversify its sources of generating revenue, boost its safety and security features, adhere to the rules and regulations, and partner with the stakeholders. 

The UPI payment apps come with a wide variety of features and operations and act as intermediaries between customers and banks or other financial institutions, thus leading to safe, fast, and convenient transactions that serve various segments of users and merchants.

Though such applications provide services free of cost for their end users, they tend to make money with the help of several sources, some of which are stated as follows:

  • Commission Income: 

One of the primary modes in which a UPI app earns revenue is through charging a certain fee from several brands and service providers for promoting their products and services and giving out discounts or even offers to customers for conducting transactions with the help of these apps. 

  • Subscription Income: 

This is another way in which UPI applications make money by charging a small transaction fee from merchants who make use of their point-of-sale or POS systems or via QR codes to facilitate payments from users. 

  • Data Monetization: 

UPI apps also use this way of generating revenue by gathering and assessing customer data like spending habits, modes and preferences of making payments, and their behavioral patterns to provide personalized services and products to their merchants and users. 

  • Financial Services: 

UPI apps also earn money by partnering up with banks and other financial institutions to provide several financial products and services like savings accounts, loans, insurance, cards, and so on to their customers and merchants and get a commission or referral amount for each successful transaction. 


UPI-based applications have transformed the entire virtual payments landscape by giving out quick, easy, and affordable digital transactions for both customers and merchants. They earn revenue via several sources like commission income, data monetization, subscription income, and by offering financial services in the marketplace. 

Also, they provide several value-added services and facilities such as discounts, offers, cashback, rewards, and much more for their merchants and users.