InvestorQ : Does the RBI plan to introduce charges for UPI transactions also?
Priyanka N made post

Does the RBI plan to introduce charges for UPI transactions also?

Neelam Naik answered.
2 months ago

Are you feeling happy that UPI payments are free of cost? That may not remain free much longer. RBI in a discussion paper on payment systems has suggested allowing service providers to charge for UPI transactions also. As of today, UPI transactions are free of cost unlike NEFT, IMPS and RTGS, which are charged. UPI enables fund transfers up to a limit in a very simple and easy manner, but if it becomes chargeable, it remains to be seen if it would still be attractive. For now, the discussion paper is up for comments.

It is very likely that transfers up to a threshold may still be free of cost in UPI to protect the interests of the smaller participants. Banks have been complaining to RBI is that the proliferation of UPI had resulted in lower usage of NEFT and IMPS, since UPI is immediate and also free of cost. RBI now wants to streamline charges for different payment services including UPI, IMPS, NEFT and RTGS ; apart from UPI. Even other payment mechanisms like credit cards, debit cards and even PPIs will fall in this ambit of regulation.

RBI has sought feedback on whether RBI should decide charges or leave it to market forces. UPI has already become the most preferred digital payment platform with over 6 billion UPI transactions in a month with a transaction value of nearly Rs10 trillion. RBI feels conditions may be ripe for charging for services. RBI may also look at standardizing the charges for debit cards and other bank account transfers.