Nirmala Sitharaman, the Union Finance Minister, stated on Friday that the federal government does not think it is appropriate to charge for digital payments at this time.
Ms. Sitharaman remarked during a speech at a gathering, “We see the public benefit in digital payments. For the Indian economy to successfully transition to the digital age, people should have unrestricted access to it. We also obtain the amount of transparency that is necessary through digitization.”
“Therefore, we continue to believe that the moment is not yet ripe to make it a charge. We are putting more and more effort towards digitization, open digital transactions, and platforms that can provide excellent access. The RBI advises creating a functioning document and leaving it in its current location, “said the Minister.
The Reserve Bank of India (RBI), which is proposing a number of modifications to the payments system, including the prospect of placing tiered fees on transactions made through the Unified Payments Interface, was collecting comments from the general public when Ms. Sitharaman made her statement (UPI).
But this week, the Indian government said that it will not charge for UPI (Unified Payments Interface) services.
The Reserve Bank of India (RBI) issued a discussion paper on “Charges in Payment Systems” for public comment, as stated in the Statement on Developmental and Regulatory Policies dated December 8, 2021, RBI said in a statement. On August 17, the discussion paper was made public.
RBI actions in the payment systems have been geared toward reducing frictions that may be brought on by systemic, administrative, or revenue-related concerns. Despite the fact that there are multiple middlemen in the payment transaction chain, consumer complaints are often about expensive and opaque fees.
Payment service fees should be affordable and competitively set for users while also offering the intermediaries the best possible income stream. It was thought helpful to do a thorough analysis of the numerous fees assessed in the payment systems, highlighting different aspects and requesting stakeholder input, in order to achieve this balance.
The RBI owns and manages the RTGS and NEFT payment systems in India. The National Payments Corporation of India (NPCI), a not-for-profit organisation supported by banks, owns and manages systems including IMPS, RuPay, UPI, and others. The other organisations, such as card networks and PPI providers, are profit-maximizing private organisations.
Notably, in July, there were more digital transactions than at any time since 2016. According to information made available by the National Payments Corporation of India, UPI reported 6.28 billion transactions totaling 10.62 trillion (NPCI).