New Delhi: The Unified Payment Interface (UPI) reformed the payment network system in India, bringing a digital revolution. One of the major reasons which led to the success of the platform was the fact that it was available for free to both users and merchants. RBI was considering introduction of a tiered charge on the UPI payments. On August 17, 2022, the RBI released a discussion paper to restructure the existing payment system and had sought public opinion on the same.
Read also: 4 Key Factors That Affect Your Eligibility for a Business Loan
Making UPI a chargeable service would have meant that a charge would be levied in lieu of every UPI transaction depending on the amount band. However, the Ministry of Finance confirmed that the government is not considering levying any charges on UPI transactions. Most financial service giants favored RBIs point as they believe that every merchant incurs a cost of Rs 2 on every UPI transaction of Rs 800. They believe that the processing charges for UPI payments would be ideal as this would ensure cost sharing among the merchants as well as the users. However, the Ministry of Finance reiterated that the government had provided funding for the digital payments to encourage more and more adoption of digital payments. The Ministry of Finance announced that alternate sources can be tapped to recover those costs incurred by the service providers.
