Charges On UPI Transactions? Deets Inside

The government of India is not going to levy any charges on Unified Payments Interface (UPI) services. In a series of tweets on Sunday, the Ministry of Finance said that UPI is a digital public good and there is no consideration of the government levying any charges for its services.

 "UPI is a digital public good with immense convenience for the public and 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," the tweet read.

In another tweet, the Ministry of Finance wrote, "The Govt had provided financial support for Digital Payment ecosystem last year and has announced the same this year as well to encourage further adoption of Digital Payments and promotion of payment platforms that are economical and user-friendly."

Recently, RBI has come up with the latest proposal, titled "Discussion Paper on Charges in Payment System," which means the bank is thinking about adding fees to each financial transaction made through the UPI system. The RBI proposed that UPI payments might be subject to a tiered charge based on various amount brackets.

The RBI discussion paper said, UPI is a fund transfer system that enables real-time money movement and 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.

In the month of July, the number of digital transactions were higher ever since 2016. In India, the RTGS and NEFT payment systems are owned and operated by RBI. IMPS, RuPay, UPI, etc, are owned and operated by the National Payments Corporation of India (NPCI). According to the data released by NPCI, UPI reported 6.28 billion transactions amounting to Rs. 10.62 trillion. Currently, there are no charges levied on transactions done through UPI.

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