UPI transactions to be charged soon? Finance Ministry has THIS to say

New Delhi: The Finance Ministry has said that the government has no plans to levy any charges for UPI (Unified Payments Interface) transactions.

The Ministry noted that UPI is a digital public good with immense convenience for the public and 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," It said in a tweet.

It further said that the government had provided financial support for the digital payment ecosystem last year and has announced the same this year as well to encourage adoption of digital payments and promotion of payment platforms that are economical and user-friendly.

UPI is a payment system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing and merchant payments into one hood.

The Finance Ministry statement has come days after the Reserve Bank of India (RBI) sought views from the public on a discussion paper on charges in payment systems.

The discussion paper covers all aspects relating to charges in payment systems such as Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT) system, Real Time Gross Settlement (RTGS) system and Unified Payments Interface (UPI) and various payment instruments such as debit cards, credit cards and Prepaid Payment Instruments (PPIs) among others.

The central bank said that the focus of RBI’s initiatives in the payment systems has been to ease frictions which may arise from systemic, procedural or revenue related issues.

"While there are many intermediaries in the payments transaction chain, consumer complaints are generally about high and non-transparent charges. Charges for payment services should be reasonable and competitively determined for users while also providing optimal revenue stream for the intermediaries," it said.

"To ensure this balance, it was considered useful to carry out a comprehensive review of the various charges levied in the payment systems by highlighting different dimensions and seeking stakeholder feedback," it added. (UNI)