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The finance ministry on Sunday called UPI services a “digital public good” and said the government was not considering charging them, four days after the Reserve Bank of India (RBI) released a discussion paper on charging fees in payment systems including UPI, NEFT and IMPS.
While officials who were aware of the reasoning behind the central bank’s discussion paper said the idea was only to help UPI companies recover operating costs, perhaps by imposing a fee of one or two paise per transaction, the ministry said these concerns would could be solved using other solutions.
“To ensure this balance, it was considered useful to undertake a comprehensive review of the various charges levied in payment systems by highlighting various dimensions and seeking feedback from stakeholders”Reserve Bank of India
“UPI is a digital public good with immense convenience for the public and increased productivity for the economy. There is no consideration in the government to levy any charges for UPI services,” the ministry said in a statement on Sunday.
“The cost recovery requirements of service providers must be met through other means,” the ministry said, adding that the government had provided financial support to the digital payments ecosystem last year and this year to encourage its further adoption and promotion. payment platforms that are “economical and user-friendly”.
On August 17, the RBI released a discussion paper on fees in payment systems, stating that these fees should be reasonable and competitive for users while providing an optimal revenue stream for intermediaries.
“To ensure this balance, it was considered useful to carry out a comprehensive review of the various fees charged in payment systems by highlighting various dimensions and seeking feedback from stakeholders,” the central bank noted, adding that consumer complaints about these services are “generally high and non-transparent fees.
“The RBI’s initiatives in payment systems have been aimed at mitigating frictions that may arise from systemic, procedural or revenue-related issues,” the company said seeking public feedback on the ideas in a discussion paper by October 3.
The discussion paper covers all aspects related to charges in payment systems such as Instant Payment Service (IMPS), National Electronic Funds Transfer (NEFT), Real Time Settlement System (RTGS) and Unified Payments Interface (UPI)] and various payment instruments such as debit cards, credit cards and prepaid payment instruments.