“No Plan To Levy a Fee For UPI Payments,” FinMin Clarified

In July, the total UPI transactions that occurred is approximately 628.84 crore, which has a total value of Rs 10.63 lakh crore. This data is drawn according to official information given by the National Payments Corporation of India. For some time, there have been discussions regarding levying charges in Unified Payment Interface systems by the stakeholders and the Finance Ministry along with the Reserve Bank of India. Moreover, recently, the Finance Ministry stated and confirmed that there is no confirmation from the government to extract any charges for services coming under UPI Transactions.

RBI Discussion Paper Data

On Wednesday, a discussion paper was released. The paper asked the stakeholders if the MDR be returned to the transactions related to UPI or not. MDR stands for merchant discount rate which is a type of fee that is given by merchants while doing transactions. The whole paper consists of forty questions regarding digital payment services and the comment section is open till 3 October 2022.

The feedback or the comments that are received will be beneficial for the RBI to guide intervention strategies and policies accordingly. Moreover, the paper covered almost every aspect of digital payment services including UPI, such as RTGS or Real Time Gross Settlement, NEFT or National Electronic Funds Transfer, and IMPS or Immediate Payment Service. The paper also covers the diverse instruments related to payment such as Prepaid Payment Instruments, credit cards, and debit cards.

Indian Government’s Argument

UPI services in the current scenario are considered digitally public goods by the Ministry of Finance concerning their usage and importance. However, the service providers are thinking of ways to generate profit and recover the costs of the transactions done via UPI.

UPI is a digital public good that offers the public great convenience and boosts economic output. The government is not considering implementing any fees for UPI services. Other methods must be used to address the service providers’ worries about cost recovery, the ministry stated in a tweet.