The Ministry of Finance on Sunday clarified that there would not be any service charge levied on UPI transactions. UPI is a digital public good and it makes people do easy transactions, increases productivity, and ultimately helps 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 Finance Ministry said in a tweet.
“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 added.
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 clarification from the government came after media reports claimed that a latest RBI paper titled “Discussion Paper on Charges in Payment System” had literature implying that the central bank was considering adding fees to each financial transaction made through the UPI system.
The reports had sparked buzz on social media with several people also seeking clarification for GOI handles on the report.
RBI in its paper sought feedback for ensuring a better framework relating to payment systems. “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 such as debit cards, credit cards and Prepaid Payment Instruments (PPIs)], etc.
The feedback received would be used to guide policies and intervention strategies”, discussed in the released paper. .
Reserve Bank of India releases Discussion Paper on Charges in Payment Systemshttps://t.co/G7B32AF3xK
— ReserveBankOfIndia (@RBI) August 17, 2022
“Charges for payment services 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,” it said.