The government has said there is "no consideration" for levying charges on transactions carried out through the Unified Payments Interface (UPI).
"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 Ministry of Finance said in a statement.
The concerns of the service providers for cost recovery "have to be met through other means", it added.
The clarification came amid speculations that UPI transactions could be charged, as a discussion paper released by the Reserve Bank of India (RBI) on August 17 sought feedback related to the subject.
"Charges for payment services should be reasonable and competitively determined for users while also providing optimal revenue stream for the intermediaries," the central bank said in a release. The feedback received would be used to guide policies and intervention strategies.
The discussion paper covered all aspects relating to charges in payment systems such as Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT) system, Real Time Gross Settlement (RTGS) system, and UPI. It also covers various payment instruments such as debit cards, credit cards, and Prepaid Payment Instruments (PPIs).
In the context of UPI, the RBI, in the discussion paper, has questioned if UPI transactions are charged, they should be administered by the regulator, or whether they should be market determined.
While clarifying it was not considering any service charge on UPI transactions, the finance ministry reiterated its support for the further adoption of the digital payments system.
"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," it said.
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