No Plans To Levy Any Charges On UPI Transactions, Clarifies India's Ministry Of Finance
The RBI had sought suggestions last week whether charges should be levied on transactions through UPI and other payment systems and interchange fees on cards.
The last few days have witnessed a new concern clouding the minds of those who transact through UPI. A discussion paper put out by the Reserve Bank of India (RBI) last week (on 17th August 2022) had sought suggestions on whether charges should be levied on transactions through UPI and other payment systems and interchange fees on cards.
Post the release of that paper by RBI, the possibility of the UPI (Unified Payments Interface) transactions getting charged became a worrying point for users, given that UPI has remained free ever since it was launched as a payment system.
But now, the government has put to rest all such concerns surrounding UPI related charges.
The finance ministry on Sunday tweeted to say that the government is not considering any charges for UPI payment services and that service providers' cost recovery will have to be met through other means. The Centre will continue to provide support to the digital ecosystem this year also to encourage further adoption of the digital economy, the finance ministry said, setting clear the government's thinking on the issue.
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"UPI is a digital public good with immense convenience for the public & productivity gains for the economy. There is no consideration in Govt to levy any charges for UPI services," it said on the microblogging site Twitter.
"The concerns of the service providers for cost recovery have to be met through other means."
"The Govt had provided financial support for #Digital Payment ecosystem last year and has announced the same this year as well to encourage further adoption of #DigitalPayments and promotion of payment platforms that are economical and user-friendly," another tweet said.
So far there are no charges on transactions done through UPI for users and merchants alike. Indicating the rise of UPI in India, UPI transactions hit their record high mark of 6 billion in July 2022, as per ET report.
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The Govt had provided financial support for #DigitalPayment ecosystem last year and has announced the same this year as well to encourage further adoption of #DigitalPayments and promotion of payment platforms that are economical and user-friendly. (2/2)
¡ª Ministry of Finance (@FinMinIndia) August 21, 2022
In December last year, the RBI had said that it will release a discussion paper on various charges levied by banks and institutions for all kinds of digital transactions through credit cards, debit cards, wallets, and UPI.
The RBI paper had also asked whether debit card transactions should be charged as normal funds transfer transactions or whether merchant discount rate (MDR) for debit cards should be uniform across merchants irrespective of turnover. It was considered necessary to undertake a comprehensive review of the rules and procedures for levying charges in different payment systems in the country, with the objective of assessing their impact on the efficiency, growth and acceptance of payment systems, the RBI paper said.
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