New Delhi: Finance Minister Nirmala Sitharaman has assured people that they will not have to pay any charges for using the Unified Payments Interface (UPI). Her remarks followed worries that the UPI law stimulus changes could give rise to fees on the UPI transactions.
Speaking in the Rajya Sabha, Sitharaman said the government has not introduced any charge on consumers for making UPI payments. She added that the recent adjustment is merely a legal structure and incorporation of a transaction fee to users is not automatic.
UPI has become one of the most popular ways to make digital payments in India. Whether it be sending money to family and friends or purchasing goods from shops, restaurants, petrol stations and online, it is used everywhere. The system provides facilities for transferring money from bank accounts by mobile phone.
The issue of possible UPI charges entered the picture after Parliament passed laws that give the legal mantle to levy charges on some digital payments. This raised a few concerns from users that they might end up paying every time they pay via UPI.
The Finance Minister, however, has clarified that consumers would continue to enjoy UPI without having to pay a transaction fee. In particular, it is hoped that person-to-person payments will remain cost-free.
Meanwhile, merchants have discussed charging a Merchant Discount Rate (MDR) for some merchants. A fee associated with processing digital payments, typically paid by the merchant or business, but not the customer, known as “MDR” (mastercard determining rate).
The government has also said that if an MDR framework is put in place in the future, it could be restricted to specific transactions only, and this would not imply that the common users have to pay for the UPI usage. A final MDR framework has not been announced as yet.
The clarification is significant since UPI is an essential component of India’s digital payment system. It is used by millions of businesses and individuals for fast and easy payment. The free service is likely to aid India’s ongoing digital payments revolution as well.
Sitharaman’s declaration comes in the wake of the recent changes in the legislation to dispel any misconceptions in the minds of the people. But, if a user is a regular transactor, the user is not charged any new UPI transaction fee now.
Now, the government is expected to continue to discuss the overall system of digital payment charges, while keeping in mind the cost of the charges shouldn’t prove to be a burden for ordinary consumers.
