No consideration to levy any charges for UPI services: Finance Ministry

The government has mandated a zero-charge framework for UPI transactions with effect from January 1, 2020

No charges will be levied for now on UPI, which accounts for nearly 60 per cent of all digital transactions in India, said finance ministry, days after RBI sought stakeholders' views on whether UPI translations should be charged.

However the finance ministry's response has elicited a concern from Payment Council of India chairman, who says all monetary support provided by the govt to make up for zero charges on UPI, is being appropriated by banks.

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"UPI is a digital public good with immense convenience for the public and productivity gain for the economy. There is no consideration in the government to levy any charges for UPI services. The concerns for the service providers for cost recovery have to be met with other means," said the Ministry of Finance after an RBI paper ignited vigorous debate on social media on whether the step would take India back to use of cash as mode of payments.

The ministry said that the government has provided financial support for the 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.

However, a lot of reaction came on the ministry’s response on its Twitter handle. Prominent among tjose was by the chairman of Payments Council of India, Vishwas Patel, who said the monetary support provided by the government to make up for the zero charges levied on UPI transactions have been appropriated by banks.

As per the government’s zero merchant discount rate policy, no fees is levied on UPI and Rupay debit card transactions.