All great things take time as success doesn’t happen overnight. However, success and fruits of hard work can be undone with just one stupid blunder within no time. Apparently, this aptly fits on the recent fiasco around Unified Payment Interface (UPI) transactions. Thankfully, the Central government has acted in time. It has cleared the air which otherwise would have soured the success in digital payment, if not decimated it completely.
Zero-charge UPI transactions to continue
The Finance Ministry has put an end to wild speculations taking place around levying charges on UPI transactions. It has categorically stated that there is no consideration in the government to levy any charge on UPI transactions. The Ministry made tweets to alleviate any fear around this issue.
In the tweet, the Ministry stated, “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.”
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
Also Read: India should make sure that Russia graduates to UPI and RuPay
In another tweet, the Ministry highlighted the government’s effort in supporting and building a robust digital payment ecosystem in the country. It emphasised that it has been promoting economical and user-friendly platforms for digital transactions.
It added, “The Govt had provided financial support for the 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 Govt had provided financial support for #DigitalPayment ecosystem last year and has announced the same this year as well to encourage further adoption of #DigitalPayments and promotion of payment platforms that are economical and user-friendly. (2/2)
— Ministry of Finance (@FinMinIndia) August 21, 2022
Also Read: If harnessed properly, UPI can replace SWIFT
The backdrop
This all started on the basis of a discussion paper of RBI titled as “Discussion Paper on Charges in Payment Systems.” In the discussion paper, RBI stated that UPI as a funds transfer system is like IMPS. Therefore it deliberated whether it could have comparable charges for UPI as that levied on IMPS. It suggested that UPI payments might be subject to a tiered charge based on various amount brackets.
Read More: Dear Shaktikanta Das, charging UPI is a suicidal move
It is important to note that there are no charges levied on UPI transactions. This didn’t happen on its own. Earlier, the central government had mandated a zero-charge framework for UPI transactions with effect from January 1, 2020. This ensured that the burdens of charges for UPI transactions are not imposed on citizens.
That is why, even a discussion point of the RBI to levy charges on UPI transactions started wild speculations. People started lambasting this suggestion and feared that it will undo all the success in the digital payment sphere. It is good to see that the government acted in time and didn’t let the speculations ruin the success of digital payment.
It is a fact that zero-charge UPI transactions have financial bearing on the banks. For that the discussion paper has rightfully suggested alternate options. It has suggested that RBI and government should provide the necessary financial support to meet the expenses needed to build and operate UPI payment interface and the digital payment ecosystem. This was partly done by the Modi government as well. It invested Rs 1300 crores to promote UPI payments.
Therefore it is important that the government deliberates properly with the concerned players. It is important that it doesn’t let any such stupid ideas/suggestions undo the success of digital payment. UPI has revolutionised the payment sphere and a success story should not be adulterated with such suggestions.
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