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UPI payments to be chargeable? RBI also wants you to pay for debit card transactions

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UPI payments could be chargeable in the future if RBI’s latest proposal gets approved. Here are all the details.

The UPI, or Unified Payments Interface service may be the single greatest invention done in India. Ever since the arrival of UPI on the scene, making online payments has been easier than ever. Instead of putting your money into a wallet, UPI allows you to make the payment directly from your bank account and send it to the receiver’s bank account – all of that is done securely. UPI payments have changed the way Indians make transactions online and now, the Reserve Bank of India (RBI) wants to charge money for it.

In a new proposal floated by the RBI, customers will now need to pay for all the UPI payments, just like IMPS payments. In its discussion paper titled “Discussion Paper on Charges in Payment Systems”, the RBI says that UPI payments are largely similar to IMPS payments (Immediate Payment Service), and since the latter attracts charges, the former should also be chargeable on every payment.

RBI wants you to pay for all UPI payments

Throughout the report, the RBI says that banks need to setup the system and maintain it in order to ensure the UPI payments keep on happening flawlessly. This puts a lot of economic burden on the banks and the RBI now wants to recover the costs from the customers. “In any economic activity, including payment systems, there does not seem to be any justification for a free service, unless there is an element of public good and dedication of the infrastructure for the welfare of the nation,” said the RBI.

“Payment systems operators are independent entities started with an initial outlay of capital. They incur further expenditure to create and operate safe and secure payment systems, acquire customers, comply with statutes / regulations and generate public awareness. Therefore, like any other industry, the objective of promoters includes recovery of costs and generation of sufficient returns to ensure continued operations; the cost to customers / merchants is an outcome of these objectives,” added the RBI.

The paper also talks about the recovering the setup cost for the entire digital payment system and hence, it could also mean debit card payments may also become chargeable in the future, if RBI decides to go ahead with it. Currently, debit card payments are free of charge for consumers.

However, the RBI says that the critical thing to discuss is who should pay for the infrastructure and the services. Will regular consumers like you and me bear the costs of these digital payments? And if the system is implemented, how will Indians react to it, given that we have just gotten used to the idea of relying on digital payments entirely?

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