The Government of India will not levy any charges on Unified Payments Interface (UPI) services. After reports circulating online that there could be a possibility of UPI transactions carrying service charges, the finance ministry on Sunday denied the news. The Finance Ministry said in a tweet that UPI will be free. “UPI is a digital public good with immense convenience for the public and productivity benefits for the economy. There is no idea in the government to levy any charges for UPI services. The concerns of the service providers for cost recovery can be met through other means. Has to be done. . .,” the tweet read.
“The government provided financial support for the #DigitalPayment ecosystem last year and this year also announced the same to promote the adoption of #DigitalPayments and promote affordable and user-friendly payment platforms,” the ministry said.
The government had provided financial assistance for #digital payment ecosystem announced this last year and this year also to encourage further adoption #digital payment and promotion of payment platforms that are economical and user-friendly. (2/2)
— Ministry of Finance (@FinMinIndia) 21 August 2022
Earlier, Prime Minister Narendra Modi had lauded the UPI transactions crossing 6 billion in July.
Modi tweeted, “This is an outstanding achievement. It indicates the collective resolve of the people of India to adopt new technologies and make the economy clean. Digital payments were especially helpful during the COVID-19 pandemic.”
The number of digital transactions in July was the highest since 2016. UPI saw 6.28 billion transactions amounting to Rs. 10.62 trillion (about Rs 10,62,000 crore), as per the data released by the National Payments Corporation of India (NPCI).
Last week, the Reserve Bank sought public opinion on fees and charges in payment systems, with an aim to make such transactions economical as well as financially beneficial to the entities involved. 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 other payment instruments.
Releasing a discussion paper on ‘Fees in Payment Systems’, the central bank said that the focus of RBI’s initiatives in payment systems has been to reduce friction arising out of systemic, procedural or revenue related issues. The Reserve Bank of India (RBI) has sought public opinion on 40 specific questions regarding fees and levies in payment systems till October 3.
