With more and more customers joining up to pay through the system, the Unified Payment Interface, or UPI, has brought about significant changes in India's payment ecosystem. While UPI transactions are now free of charge, the Reserve Bank of India has recently asked stakeholders for opinion on the prospect of charging a tiered fee on them.
The RBI published a discussion paper on charges in payment systems on Wednesday, August 17, in an effort to organise its policies and simplify the framework of fees for various payment services and activities in India. These include RTGS (Real-Time Gross Settlement), IMPS (Immediate Payment Service), NEFT (National Electronic Funds Transfer), and other payment methods such as debit cards, credit cards, and prepaid payment instruments (PPIs).
Unified Funds Interface (UPI) is a system that connects multiple bank accounts to a single mobile application (of any participating bank), combining multiple banking alternatives, smooth fund routing, and service provider funds under one roof.
“RBI has not issued directions concerning costs for UPI transactions. The Authorities has mandated a zero-charge framework for UPI transactions with impact from January 1, 2020. Which means that costs in UPI are nil for customers and retailers alike. Maintaining in view that the intent of this dialogue paper is to elicit common suggestions, a number of questions on what strategy needs to be adopted, have been included,” it stated.
The RBI outlined various parameters when deciding whether or not fees should be assessed on UPI funds."UPI is each a funds switch in addition to a service provider fee system that facilitates settlement of fee transactions utilizing a mix of various members.”