UPI Payment Fees Latest News: The government is not considering any fees on UPI services, the Department of Finance clarified today. The ministry said UPI service providers’ concerns about cost recovery should be addressed through other means. He also noted that UPI is a digital public good with immense convenience for the public and productivity gains for the economy.
“UPI is a digital public good with immense convenience for the public and productivity gains for the economy. There is no consideration for the government to levy fees for UPI services. cost recovery must be met by other means The government had provided financial support for #DigitalPayment ecosystem last year and announced the same this year to encourage the adoption of #Digital Payments and promoting cost-effective and user-friendly payment platforms,” the finance ministry said in a series of tweets.
The Finance Ministry’s clarification came days after the Reserve Bank of India (RBI) sought public comment on UPI’s payments and charges.
“RBI has not issued any guidelines regarding fees for UPI transactions. The government has imposed a zero fee framework for UPI transactions effective January 1, 2020… This means that UPI fees are zero for users Bearing in mind that the intention of this discussion paper is for general feedback, a few questions on the approach to take have been included,” RBI said in its “Discussion Paper on fees in payment systems”.
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While noting that UPI as a funds transfer system is like IMPS, the working paper stated, “Therefore, it could be argued that UPI fees should be similar to l IMPS for funds transfer transactions A tiered fee could be imposed according to the different amount brackets.
Questions for comments
The discussion document shared the following questions for public comment:
- In the context of zero charges, is cost subsidy a more effective alternative?
- If UPI transactions are charged, should the MDR for them be a percentage of the transaction value or should a fixed amount regardless of the transaction value be charged?
- If fees are introduced, should they be administered (eg by the RBI) or market determined?