Current affairs

Viral story: Will you be charged for using UPI? Hear from the Union Finance Ministry!

By alagu, 22 August, 2022
UPI, PhonePe, Finance Ministry

The Union Ministry of Finance on Sunday issued a clarification for nationwide speculation whether the people would be imposed with service charges for using UPI (Unified Payments Interface) services like GPay and PhonePe. The clarification has come as a relief for millions of Indians as these UPI services have become a crucial part of everyone's lives with such platforms getting prioritized to make payments. 

On Sunday, the Finance Ministry ruled out any plan of imposing service charges for using UPI and affirmed that no such charge would be levied. Taking to Twitter, the Finance Ministry wrote, "UPI is a digital public good with immense convenience for the public and productivity gains for the economy. There is no consideration in Govt to levy any charges for UPI services." 

"The concerns of the service providers for cost recovery have to be met through other means", the ministry added. It further said, "The Govt 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 promotions of payment platforms that are economical and user-friendly." 

With the affirmed tweet, the UPI services would remain free of any service charges. The speculations of service charges for UPI arose when the RBI suggested that the UPI payments must be charged on tiers. Earlier this month, the RBI issued a discussion paper on charges in the payment system and suggested that UPI payments might be subject to a tiered charge based on various amount brackets. 

By highlighting that the UPI is a fund transfer system like IMPS, the RBI's discussion paper argued that the charges in UPI need to be similar to charges in IMPS for fund transfer transactions. As UPI platforms have been reporting a humongous scale of growth with users of all ages, it was widely discussed that the service charge would be imposed for such platforms. 

The growing speculations pushed the Union Finance Ministry to issue a clarification, which was made on Sunday. According to recent data released by National Payments Corporations of India (NPCI), UPI reported 6.28 billion transactions in July amounting to Rs 10.62 trillion. Earlier, Prime Minister Narendra Modi acclaimed the UPI platforms for crossing 6 billion, which was the highest feat since 2016.

 

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