With the increase in the number of UPI transactions Mrs.Sitaraman, Union Finance Minister addressed that the government believes that this is not the right time to make digital payments chargeable. Indians are moving towards more digitalized payment methods and now if special charges are levied, it will ultimately collapse the ease of UPI.
In the event which was held on Friday, Union Finance Minister Nirmala Sitharaman disagreed with making digital payments chargeable. Speaking at the event, Mrs.Sitharaman said, “We see digital payment as the public good. People should be able to access it freely so that the digitization of the Indian economy becomes attractive. Also, through digitization, we achieve a level of transparency which is so required.”
“Therefore, we still think it is not the right time to make it chargeable. We are working on more and more pushing toward open digital transactions, digitization, and platforms that can enable great access. The RBI’s recommendation is to a working paper and lets the working paper where it is,” the Minister added.
Luckily, The government had already announced in the last week that it will not levy any UPI. Even if the government levies charges on UPI, it should be reasonable and competitively determined for users while also providing an optimal revenue stream for the intermediaries.
Notably, the number of digital transactions in July was the highest ever since 2016. UPI reported 6.28 billion transactions amounting to ₹ 10.62 trillion, according to data released by the National Payments Corporation of India (NPCI).
The focus of RBI’s initiatives in the payment systems has been to ease frictions that may arise from systemic, procedural, or revenue-related issues. While many intermediaries exist in the payments transaction chain, consumer complaints are generally about high and non-transparent charges. The government is looking for a solution in order to handle intermediaries. Systems like IMPS, RuPay, UPI, etc., are owned and operated by the National Payments Corporation of India (NPCI), a not-for-profit entity promoted by banks.
