UPI Payment Charges Latest News: The Government is not considering any charges on UPI services, the Ministry of Finance today clarified. The Ministry said that the concerns of the UPI service providers for cost recovery would have to be met through other means. It also noted that UPI is a digital public good with immense convenience for the public and productivity gains for the economy.
“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. The concerns of the service providers for cost recovery have to be met through other means. 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,” the Ministry of Finance said in a series of tweets.
The clarification from the Ministry of Finance has come days after the Reserve Bank of India (RBI) sought public feedback on UPI payments and charges.
“RBI has not issued instructions regarding charges for UPI transactions. The Government has mandated a zero-charge framework for UPI transactions with effect from January 1, 2020… This means that charges in UPI are nil for users and merchants alike. Keeping in view that the intent of this discussion paper is to elicit general feedback, a few questions on what approach should be adopted, have been included,” RBI said in its ‘Discussion Paper on Charges in payment Systems’.
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While noting that UPI as a funds transfer system is like IMPS, the discussion paper said, “Therefore, it could be argued that the charges in UPI need to be similar to charges in IMPS for fund transfer transactions. A tiered charge could be imposed based on the different amount bands.”
Questions for Feedback
The discussion paper has shared the following questions for public feedback:
- In the context of zero charges, is subsidising costs a more effective alternative?
- If UPI transactions are charged, should MDR for them be a percentage of transaction value or should a fixed amount irrespective of the transaction value be levied?
- If charges are introduced, should they be administered (say, by RBI) or be market determined?