UPI to remain free. Modi Govt not considering any charges on UPI services: Finance Ministry Clarify.

UPI to remain free. Modi Govt not considering any charges on UPI services: Finance Ministry Clarify.

UPI to remain free: in a tweet, the finance minister of India said: “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 Govt had provided financial support for #DigitalPayment ecosystem last year and announced the same this year as well to encourage further adoption of #DigitalPayments and promotion of payment platforms that are economical and user-friendly.”

UPI to remain free: The Finance Ministry on Sunday said that UPI would remain free and that the government is not considering levying any charges on it. Earlier, there was a rumor about whether the Modi-led union government would come up with a rule wherein users must pay for every UPI transaction.

In a tweet on Sunday late evening, the Finance Minister of India clarification stating that there is no consideration to levy any charges for Unified Payment Interface(UPI) services.

Check out Finance Ministry’s tweets below

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. (1/2)

— Ministry of Finance (@FinMinIndia) August 21, 2022

Unified Payment Interface(UPI)

A unified Payment Interface (UPI) is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing, and merchant payments into one hood. It also caters to the “Peer to Peer” collect request which can be scheduled and paid as per requirement and convenience. With the above context in mind, NPCI conducts a pilot launch with 21 member banks. The pilot launch was on 11th April 2006 by Dr. Raghuram G Rajan, Governor, RBI at Mumbai. Banks have started to upload their UPI-enabled Apps on the Google Play store and Apple store from 25th August 2016 onward.

What caused the confusion?

In a press release dated, August 17, RBI asked for feedback on a discussion paper titled “Charges in Payment System”. the paper was made public in December 2021 and feedback can be submitted till October 3, 2022. The RBI’s press statement notes that the discussion paper cover “covers all aspects relating to charges in payment system[such as Immediate Payment Service(IMPS), National Electronic Funds Transfer(NEFT) system, Real Time Gross Settlement (RTGS) system and Unified Payment Interface(UPI) service] and various payment instrument [such as debit card, credit card and prepaid payment instruments(PPIs)], etc”

What has the government done so far to promote UPI payments?

In the Budget speech for 2022-23, Finance Minister Nirmala Sitharaman said: “The financial support for digital payment ecosystem announced in the previous Budget will continue in 2022-23. This will encourage further adoption of digital payments. There will also be a focus to promote the use of payment platforms that are economical and user friendly”. The government allocated Rs 200 crore for reimbursement of charges towards RuPay debit card and UPI transactions. In 2021-22, it had budgeted Rs 1,500 crore towards this.

So will UPI transaction levy charges?

No. The RBI is only seeking public feedback on the larger issue of payment system and charges. There is no proposal for charging your daily UPI transaction. So you can continue transferring money via UPI without any worry. UPI payment is safe.