The Union Finance Ministry on Sunday, 21 August, said that the United Payments Interface (UPI) is a digital public good and that the government was not considering to levy any charges on the services.
"UPI is a digital public good with immense convenience for the public and productivity gains for the economy. There is no consideration in government to levy any charges for UPI services. The concerns of the service providers for cost recovery have to be met through other means," the ministry said in a statement on Twitter.
The clarification comes amid speculation over the RBI's discussion paper on charges in the payment system suggesting that UPI payments might be subject to a tiered charge based on various amount brackets.
"The government had provided financial support for 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," the ministry further said.
The RBI discussion paper issued on 17 August proposed an examination of the charges involved in various channels of digital payments such as credit cards, debit cards, prepaid payment instruments (cards and wallets), UPI, etc.
It stated that UPI as a fund transfer system is like IMPS and therefore, it could be argued that the charges in UPI need to be similar to charges in IMPS for fund transfer transactions.
The government had mandated a zero-charge framework for UPI transactions in 2020, making it free for both customers and merchants.
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