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The Finance Ministry has issued a clarification stating that there is “no consideration” to levy any charges for United Payment Interface (UPI) services. The ministry issued this statement on its official Twitter account after there was confusion when the Reserve Bank of India (RBI) asked for public feedback on UPI payments and charges.
The ministry in a series of tweets 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.”
UPI has become one of the most popular methods for daily digital monetary transactions, driven by apps like Google Pay, PhonePe, Paytm and others. According to the National Payments Council of India, the total value of UPI transactions stood at 10,62,991.76 crore for the month of July alone this year. So naturally, the RBI’s indication that there could be charges on these transactions has raised concerns.
What caused the confusion?
In a press release dated, August 17, RBI asked for feedback on a discussion paper titled “Charges in Payment Systems”. The paper was made public in December 2021 and feedback can be submitted till October 3, 2022.
The RBI’s press statement notes that the discussion paper covers “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 [such as debit cards, credit cards and Prepaid Payment Instruments (PPIs)], etc.”
Check out Finance Ministry’s tweets below
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
RBI is still asking for feedback around charges in payment systems. Remember, that all other forms of money transfer such as IMPS, NEFT and RTGS have a bank fee levied on them, which is often determined by the amount. But given that UPI was also mentioned in this press release, this has led to confusion that there could soon be charges on UPI transactions as well.
It should be noted that the RBI paper does not propose any charges on UPI transactions.
In fact the paper notes, “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 (paragraph 7.6). 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.”
So will UPI transactions levy charges?
No. The RBI is only seeking public feedback on the larger issue of payment systems and charges. There is no proposal for charging your daily UPI transactions. So you can continue transferring money via UPI without any worry.
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