RBI had earler, floated a paper on levying charges for payment systems including UPI, NEFT and IMPS
RBI had earler, floated a paper on levying charges for payment systems including UPI, NEFT and IMPS
The Finance Ministry on Sunday called UPI services a ‘digital public good’ and asserted that the government is not considering levying charges for them, four days after the Reserve Bank of India (RBI) floated a discussion paper on levying charges in payment systems, including the UPI, NEFT and IMPS.
While officials aware of the deliberations behind the central bank’s discussion paper said the idea was only to help firms providing UPI services recover their operational costs, perhaps by levying a charge as low as one or two paise per transaction, the Ministry said these concerns could be addressed through other solutions.
“UPI is a digital public good with immense convenience for the public and productivity gains for the economy. There is no consideration in Govt to levy any charges for UPI services,” the Ministry said in a statement on Sunday.
“The concerns of the service providers for cost recovery have to be met through other means,” the Ministry said, adding that the government had provided financial support for digital payment ecosystem last year as well as this year to encourage their further adoption and promotion of payment platforms that are ‘economical and user-friendly’.
On August 17, the RBI issued a discussion paper on charges in payment systems, stating that such charges should be reasonable and competitively determined for users, while also providing optimal revenue stream for the intermediaries.
“To ensure this balance, it was considered useful to carry out a comprehensive review of the various charges levied in the payment systems by highlighting different dimensions and seeking stakeholder feedback,” the central bank noted, adding that consumer complaints about such services are ‘generally about high and non-transparent’ charges.
“The focus of RBI’s initiatives in the payment systems has been to ease frictions which may arise from systemic, procedural or revenu- related issues,” it had said, seeking public feedback on the ideas in the discussion paper by October 3.
The discussion paper covers all aspects relating to charges in payment systems such as Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT) system, Real Time Gross Settlement (RTGS) system and Unified Payments Interface (UPI)] and various payment instruments like debit cards, credit cards and Prepaid Payment Instruments.
