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Updated August 22nd, 2022 at 08:08 IST

'UPI transactions won't be charged, PSPs must find other means for cost recovery': FinMin

The Finance Ministry issued a clarification over reports of charges for UPI payments and said the govt will not impose any extra charges on UPI payments.

Reported by: Abhishek Raval
UPI
IMAGE: Shutterstock, PTI | Image:self
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The Finance Ministry issued a clarification on August 21 on reports of charges being levied for UPI payments and stated that the government will not impose any extra charges on UPI payments as it is a digital public service intended for better functioning of the economy and also provides ease of transactions for the public.

The Ministry further clarified that incentives were provided to the payment system providers last year and this year too, additional concessions have been announced to boost digital transitions in the country. Notably, the Reserve Bank of India (RBI) on August 17 invited suggestions from the public on charging for digital transactions.

Commenting on the Return on Investment (RoI) for the service providers, the Finance Ministry apprised that measures will have to be coined via other ways in order to generate revenue for them.

‘UPI transactions will not be charged’: Finance Ministry

The government stated that no charges will be levied for UPI transactions, responding to reports of per-transaction charges on UPI payments. “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.”

Govt support to Digital payment ecosystem

The service providers in the digital payment ecosystem were aided with concessions in 2021 and additional support was given to them in 2022 too, the Ministry said. “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 Finance Ministry stated.

RBI invites views from public on charging for digital transactions

The RBI sought views from the public on August 17, Wednesday on charges for digital payment systems. The financial regulator further highlighted that the charges should be reasonable and competitively determined for the users for gaining wider acceptance. However, RBI reiterated that they have neither taken any action nor have any view on the same.

The RBI argued that for continued operations of the payment systems, and to invest in new technologies, processes and systems, the payment system providers should earn enough income.  

The payment systems include IMPS, NEFT, UPI and debit cards, among others. Significantly, in just six years after the launch of UPI, the platform has been able to garner 26 crore unique users and five crore merchants.

Image: Shutterstock, PTI

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Published August 22nd, 2022 at 00:20 IST

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