The Indian government is not considering charging for UPI services, according to a clear statement from the Ministry of Finance today.
The Ministry said that in order to allay the UPI service providers’ worries about cost recovery, different strategies will need to be employed. Additionally, UPI was recognised as a digital public utility that greatly enhances public convenience and increases economic productivity.
‘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. 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,’ In several tweets, the Ministry of Finance made this statement.
According to the RBI discussion paper published earlier this month, since UPI is a fund transfer system similar to IMPS, it might be argued that the fees for fund transfer transactions in UPI should be comparable to those in IMPS.
The government has required a zero-fee framework for UPI transactions beginning on January 1, 2020. This demonstrates that with UPI, neither users nor merchants pay any costs.
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