No plan to levy charges on UPI, clarifies Finance Ministry
Following a Reserve Bank of India (RBI) discussion paper suggesting a levy on UPI payments, the Finance Ministry on Sunday night said on Twitter it does not plan to implement it.
“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 ministry tweeted on its official handle.
While service providers have been asking for means of cost recovery, charging a fee would not be the option, it added. “The concerns of the service providers for cost recovery have to be met through other means,” it said.
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. (1/2)
— Ministry of Finance (@FinMinIndia) August 21, 2022
“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,” it said in another tweet.
RBI proposal
The RBI last week sought public feedback on the possibility of imposing a phased charge on payments made through Unified Payment Interface (UPI) in a bid to make such transactions affordable as well as economically remunerative for the entities involved.
The payment systems include Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT) system, Real Time Gross Settlement (RTGS) system and Unified Payments Interface (UPI). Debit cards, credit cards and Prepaid Payment Instruments (PPIs) are among the other payment instruments.
The central bank, which released its discussion papers on Charges in Payment Systems, said it aims to streamline its framework of charges for the said payment services.
The focus of RBI’s initiatives in the payment systems has been to ease frictions which may arise from systemic, procedural or revenue-related issues, the central bank said.
“UPI as a funds transfer system is like IMPS. 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 on the different amount bands,” the discussion paper said.