The Government has no plans to levy charges on transactions carried out through the Unified Payments Interface (UPI) services
Less than a week after the Reserve Bank of India (RBI) came out with a discussion paper seeking stakeholder views on charges in payment systems, The Central government has clarified that there are no plans to levy charges on transactions carried out through the Unified Payments Interface (UPI) services.
The Ministry of Finance tweeted, “UPI is a digital public good with immense convenience for the public and productivity gains for the economy. There is no consideration in government to levy any charges for UPI services. 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 to encourage further adoption of digital payments and promotion of payment platforms that are economical and user friendly.” It added.
The clarification came after the Reserve Bank of India (RBI) sought feedback from stakeholders on the possibility of imposing gradual charges on payments made through UPI, based on different amount bands.
In a discussion paper released on Wednesday, the RBI had asked stakeholders if merchant discount rate (MDR), a fee paid by merchants to acquiring banks, should be brought back for UPI transactions. The RBI paper, seeking feedback on the fee structure for a range of digital payment services through a set of 40 questions, is open for comments till October 3.
The discussion paper has sought to streamline the framework of charges for different payment services or activities, such as UPI, IMPS (Immediate Payment Service), NEFT (National Electronic Funds Transfer), RTGS (Real-Time Gross Settlement), and payment instruments including debit cards, credit cards, and prepaid payment instruments (PPIs).
This discussion paper outlines existing rules and manner of charges levied in payment systems and presents other options through which such charges could be levied. The intent is to present various issues involved in an unbiased manner and to seek feedback on a set of questions that emanate therefrom. The idea is also to get inputs and thereafter use them for further policy making. As can be seen at the end of discussion on different payment systems, a few queries have been raised on which public / stakeholder feedback is requested. Based on the feedback received, RBI would endeavour to structure its policies and streamline the framework of charges for different payment services / activities in the country. At this stage, it is reiterated that RBI has neither taken any view nor has any specific opinion on the issues raised in this discussion paper.
