UPI payments are nothing new in India now. UPI has not only made money transactions digitally easy but it is also providing great business opportunities for people in many cases. As of now, no charges are levied on UPI payments in the country. However, now the Reserve Bank is indicating to levy charges on payment from UPI.
RBI sought opinions from people
The country’s central bank has issued a discussion paper for this. In this discussion paper, the Reserve Bank has gotten the general public’s feedback. The discussion paper also discusses charging fees for using UPI to make payments. In such a situation, there is a possibility that in the coming time, we will have to pay some charges while making payments through UPI.
The Reserve Bank of India is preparing to recover the cost of developing payment processes in the country and the infrastructure created to ensure payments. RBI’s discussion paper states that UPI is also a fund transfer system like IMPS. Therefore, it should be charged like IMPS. The discussion paper also states that different charges may be prescribed for different amounts.
Expensive to build payment services infrastructure
The Reserve Bank of India has said in its discussion paper that UPI as a fund transfer system ensures real-time transfer of money. To ensure a complete process of settlement of payments, PSOs and banks have to spend on building the necessary infrastructure so that transactions can be processed without any risk. Additionally, RBI made it clear in the discussion paper that there is no justification for free services in any economic activity, including any payment system, so long as it does not advance the welfare of the populace and the nation. The big question is, who will bear the huge expenditure on building the infrastructure to ensure a service?
RBI gave this reason for charging UPI
Along with UPI, the Reserve Bank has also sought public opinion on levying charges on services like debit card transactions, RTGS, NEFT, etc. RBI has said that levying charges on payment through Debit Card Payment System, RTGS Payment System (Real Time Gross Settlement). And NEFT (National Electronic Funds Transfer) payment system is not irrational to ensure these services are not irrational. A significant amount of money has been invested in building an infrastructure. In other words, the central bank is now looking at the option of earning money in exchange for these services.
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