The ministry has further noted that UPI is a digital public good that is very convenient for the public and productivity gains for the economy. The Tweet says 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 further adoption of digital payments.
UPI payments will not be charged
The Ministry of Finance clarified that UPI payments will not be charged and that the service providers’ recovery cost would have to be met through other means. This comes after the Reserve Bank of India (RBI) sought public feedback on UPI payments and charges.
“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. The Govt had provided financial support for the Digital Payment ecosystem last year and announced the same this year as well to encourage further adoption of DigitalPayments and promotion of payment platforms that are economical and user-friendly,” said the Ministry of Finance in a tweet.
RBI has not issued instructions regarding charges for UPI transactions. The government has mandated a zero-charge framework for UPI transactions with effect from January 1st, 2020. This means that charges in UPI are zero for users and merchants alike. “Keeping in view that the intent of this discussion paper is to elicit general feedback, a few questions on what approach should be adopted, have been included,” RBI said in its ‘Discussion Paper on Charges in payment Systems’.
UPI as a fund transfer system is like IMPS, the discussion paper said, ”Therefore, it could be argued that the charges in UPI need to be similar to charges in IMPS for fund transfer transactions. A tiered charge could be imposed based on the different amount bands.“