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Sigh Of Relief! Govt Not Considering Levying Any Charge On UPI Transactions, Clarifies Finance Ministry
Writer: Shiva Chaudhary
A post-graduate in Journalism and Mass Communication with relevant skills, specialising in content editing & writing. I believe in the precise dissemination of information based on facts to the public.
India, 22 Aug 2022 6:35 AM GMT
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Creatives : Shiva Chaudhary
A post-graduate in Journalism and Mass Communication with relevant skills, specialising in content editing & writing. I believe in the precise dissemination of information based on facts to the public.
The statement came amid speculation after the RBI's discussion paper on payment system charges, which suggested that UPI transfers may be subject to a tiered charge depending on different amount brackets.
The United Payments Interface (UPI) is a digital public good, and the government is not considering levying any charge on transactions done through it; the Union Finance Ministry issued the clarification on Sunday (August 21).
The Central Government stated that other modes would be worked out for UPI platforms to recover the cost of their services. Presently there are no charges levied on transactions carried out through UPI, reported Hindustan Times.
The statement came amid speculation after the Reserve Bank of India's (RBI) discussion paper on payment system charges, which suggested that UPI transfers may be subject to a tiered charge depending on different amount brackets.
Finance Ministry Issues Clarification
The Ministry of Finance clarified through its official Twitter handle and shared a thread on August 21. They wrote, "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."
Further, they stated, "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."
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. (2/2)
— Ministry of Finance (@FinMinIndia) August 21, 2022
RBI Discussion Paper
Earlier this month, the RBI invited feedback from the public on the various modifications proposed in the payments system, including the prospect of imposing tiered charges on UPI transactions.
According to the RBI discussion paper released on August 17, UPI as a fund transfer system is like Immediate Payment Service (IMPS); therefore, it could be argued that for fund transfer transactions, the charges in UPI need to be similar to that of IMPS, reported NDTV.
From January 1, 2020, the government has mandated a zero-charge framework for UPI transactions, meaning that UPI charges are nil for users and merchants.
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