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No Plan To Impose Charges On UPI Payments, Says Finance Ministry

On Sunday, the Finance Ministry said that there is no such plan to impose charges on Unified Payments Interface or UPI based payments, putting rest to all the rumours spreading on the basis of a discussion paper of RBI regarding digital payments.

No Plan To Impose Charges On UPI Payments, Says Finance Ministry

No Plan To Charge UPI Payments

“UPI is a digital public good with immense convenience for the public and productivity gains for the economy. There is no consideration in the government to levy any charges for UPI services. The concerns of the service providers for cost recovery have to be met through other means,” a tweet says from the official handle.

The Government had also supported the digital payment system last year and had plans to support it this year also. In order to promote this user-friendly payment system, all the support is being offered.

In January 2020, “the Centre withdrew the merchant discount rate (MDR) on UPI and homegrown Rupay debit card transactions, leading to exponential growth in payments through UPI. MDR is the charge paid by a merchant to the bank, card network and point-of-sale provider for offline transactions and to the payment gateways for online purchases”, mentioned livemint.

Further mentioned, “This has been a contentious issue, and the industry has repeatedly urged the government to review the decision, citing hurdles to innovation and inadequate funds to support and upgrade the requisite infrastructure. Deliberating on whether the use of payment mechanisms should incur a cost for the user, the RBI discussion paper said on 17 August that payment system operators are independent entities and have expenditure associated with the setup, signalling the likelihood of charges being brought back”.

Also read:

Major Alert For PNB Customers, Accounts To Get Blocked If KYC Not Done

As per RBI’s document, “In any economic activity, including payment systems, there does not seem to be any justification for a free service unless there is an element of public good and dedication of the infrastructure for the welfare of the nation.”

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Rishabh Sharma

Rishabh is an experienced content writer and editor, he is working for Viralbake to cover a diversified range of categories. His articles mainly focus on providing information, being a travel guide, educating others, and also making people aware of technology, after all, he is a technophile. When not writing he can be found gaming, watching movies, and travelling.

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