RBI: Now payment through UPI will be expensive, even card transactions will not be free

UPI has not only made money transactions easy digitally but it is also providing great business opportunities for people in many cases.

RBI: Now payment through UPI will be expensive, even card transactions will not be free

India's own digital payment system UPI has proved to be a big hit since its launch. UPI payments are nothing new in India now. UPI has not only made money transactions easy digitally but it is also providing great business opportunities for people in many cases. As of now, no charge is levied on UPI payments in the country. However, now the Reserve Bank is indicating to levy a charge on payment from UPI.

A major reason for this can also be that the payment is settled in a pinch and there is no charge for it. The Reserve Bank has issued a 'Discussion Paper on Fees in Payment Systems' in this regard and has sought comments from the public on this.

RBI sought opinions from people

The Reserve Bank has sought the opinion of the general public on this discussion paper. The discussion paper also talks about levying charges for making payments through UPI. In such a situation, there is a possibility that we will have to pay some charges while paying through UPI in the coming times.

The Reserve Bank of India is preparing to recover the cost of the development of payment processes in the country and the infrastructure created to ensure payments. RBI's discussion paper states that UPI is also a fund transfer system like IMPS. Therefore, charges should be levied on it like IMPS. It has also been said in the discussion paper that different charges may be prescribed for different amounts.

Expensive to build payment services infrastructure

The Reserve Bank of India has said in its discussion paper that UPI as a fund transfer system ensures real-time transfer of money. In order to ensure the complete process of settlement of payments, PSOs and banks have to spend on creating the necessary infrastructure so that transactions can be processed without any risk. 

RBI has also made it clear in the discussion paper that there is no argument for free services in any economic activity, including any payment system, provided it is not for the good of the people and the welfare of the country. The big question is, who will bear the hefty expenditure on creating the infrastructure to ensure a service?

This reasoning behind the charges on RTGS payment

The central bank has said that a huge investment has also been made in the case of RTGS and it also costs to operate. In such a situation, if the Reserve Bank has imposed charges on RTGS payment, then it should not be considered a way of earning. RTGS is used for high-value transactions and is generally used by banks and large financial institutions. 

Should the Reserve Bank provide the service free of cost in such a system, in which large institutions are members? Similarly, with regard to NEFT, the paper states that even though such transactions can be kept in the people-friendly category and it has helped in digitizing payments, is there any charge on such payments even after some time of inception? Shouldn't be recovered?