UPI transactions charges: The Reserve Bank of India sought feedback from the stakeholders on the possibility of imposing gradual charges on the payments made through UPI, based on the different amount bands. This latest news from the Central Bank of the country has sparked debate on UPI transaction charges and whether Government is planning on imposing it. UPI (Unified Payment Interface) is an instant real-time payment system which is developed by the National Payments Corporation of India. With a wide consumer base all over the country, if UPI transaction charges are imposed, the impact will be seen on an extremely convenient mode of transaction.
Lets’ see what the Government said on UPI transaction charges and what impact it will have on the day-to-day transaction.
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. (1/2)
— Ministry of Finance (@FinMinIndia) August 21, 2022
UPI Full Form
The full form of UPI is the Unified Payment Interface. It is developed by the National Payments Corporation of India.
UPI Transaction Charges 2022: What is the Government saying?
The Finance Ministry has clarified that there is no move in the government to levy any charge on UPI transactions. It further asserted the concerns of service providers for cost recovery have to be met through other means.
In a series of posts on Twitter, the Finance Ministry said, “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.”
It further said that the Government had provided financial support for the digital payment ecosystem in 2021 and announced the same in 2022 as well to encourage further adoption of the digital payments and promotion of payment platforms that are economical and user friendly.
UPI transaction charges 2022: What triggered the debate?
Apprehensions about the imposition of UPI transaction charges was triggered by the discussion paper on fees in the payment systems. The Reserve Bank of India’s paper on payments has not made any suggestions. However, it has raised issues by raising questions on several topics, such as whether these charges should be regulated or not, whether merchant fees on credit cards should be linked and whether fee transaction should be replaced with subsidies to providers.
UPI transaction charges: What is UPI?
The Unified Payment Interface (UPI) is described as a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing and merchant payments under a single system. UPI transactions have soared and helped in massive financial inclusion efforts.
UPI Service
UPI is a real-time payment system that allows sending or requesting money from one bank account to another. Any UPI client app may be used and multiple bank accounts may be linked to a single app. Money can be sent or requested by using a user-created Virtual Payment address or UPI ID that helps in sending or requesting money from a bank account.
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