The RBI discussion paper issued earlier this month said, UPI as a fund transfer system is like IMPS and therefore, it could be argued that the charges in UPI need to be similar to charges in IMPS for fund transfer transactions.
United Payments Interface (UPI) is a digital public benefit, according to the Finance Ministry, and no taxes are being considered by the government for this. This assertion allays concerns raised by the RBI's discussion paper on fees in the payment system, which raised the possibility that UPI payments would be subject to a tiered fee structure depending on different amount ranges.
At this time, there are no fees associated with UPI transactions. "UPI is a digital public good that offers the public great convenience and boosts economic output. The government is not considering implementing any fees for UPI services. Other methods must be used to address the service providers' concerns over cost recovery," a tweet from the Finance Ministry stated.
The Govt had provided financial support for ecosystem last year and has announced the same this year as well to encourage further adoption of and promotion of payment platforms that are economical and user-friendly. (2/2)
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"The Govt had provided financial support for #DigitalPayment ecosystem last year and has announced the same this year as well to encourage further adoption of #DigitalPayments and promotion of payment platforms that are economical and user-friendly," another tweet said.
According to the RBI discussion paper published earlier this month, UPI is similar to IMPS in terms of fund transfer systems, hence it might be claimed that UPI fund transfer transaction fees should be comparable to IMPS fund transfer fees. The government's zero-MDR (merchant discount rate) policy, which is still in effect for RuPay and UPI transactions, was called for in the report. Service providers contend that by adding an MDR fee to digital payments, systems may be improved.
Beginning on January 1, 2020, the government will enforce a framework with zero fees for UPI transactions. As a result, neither consumers nor merchants will incur any fees when using UPI.
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(With PTI inputs)