The government is not considering levying fees on transactions conducted through Unified Payments Interface (UPI), the Union’s finance ministry clarified on Sunday. This came amid speculation that the government may want to impose a fee on the popular mode of financial transactions. The Center also said other means would be worked out for UPI platforms to recoup the cost of their services.
“UPI is a digital public good with tremendous convenience to the public and productivity gains to the economy. The government is not considering charging fees for UPI services. The service providers’ concerns for cost recovery need to be addressed in other ways,” said the ministry of ginance in a tweet.
“The government had provided financial support to the #DigitalPayment ecosystem last year and announced it this year to encourage the continued adoption of #DigitalPayments and the promotion of payment platforms that are economical and easy to use,” it added.
Recently, the Reserve Bank of India (RBI) has asked the public for feedback on the various proposed changes to the payment system, including the ability to impose tiered fees for transactions made through the UPI.
As announced in its Dec. 8, 2021, Development and Regulatory Policy Statement, the central bank has released a discussion paper on “Costs in Payment Systems” for public feedback, the RBI said in a statement. The discussion paper was released on August 17.
Considered one of the most successful Real-Time Payments (RTP) systems in the world, UPI recorded a volume of $940 billion (39 billion transactions) in 2021, equivalent to 31 percent of India’s GDP.
(With input from agencies)