UPI Will Remain Free, Confirms India’s Finance Ministry

Contrary to reports from last week, the Government of India won’t charge for Unified Payments Interface (UPI) services. In a tweet on Sunday, the finance ministry refuted earlier reports and clarified, “UPI is a digital public good that offers the public great ease and boosts economic output. The government is not considering implementing any fees for UPI services. Other methods must be used to address the service providers’ concerns around cost recovery.”

The ministry said, “The Govt had announced financial assistance for the #DigitalPayment ecosystem last year and has done the same this year to encourage further use of #DigitalPayments and promotion of affordable and user-friendly payment systems.”

July had the most digital transactions since 2016 in terms of volume. According to information made available by the National Payments Corporation of India (NPCI), UPI reported 6.28 billion transactions totaling ₹10.62 trillion (about ₹10,62,000 crore).

The Reserve Bank polled the public last week about fees and charges in payment systems with the goal of making such transactions both inexpensive and financially rewarding for the parties involved. The payment systems include the Unified Payments Interface (UPI), the Real Time Gross Settlement (RTGS) system, the National Electronic Funds Transfer (NEFT) system, and the Immediate Payment Service (IMPS). Other payment methods include debit cards, credit cards, and prepaid payment instruments (PPIs).

The RBI stated in a discussion paper on “Charges in Payment Systems” that the main goal of its activities in the payment systems has been to reduce frictions that may be brought on by systemic, administrative, or revenue-related problems. The Reserve Bank of India (RBI) is seeking public opinions by October 3, 2022 on 40 specific topics regarding fees and taxes in payment systems.