UPI

Guwahati: The Reserve Bank of India (RBI) has sought feedback from stakeholders on the possibility of imposing a “tiered” charge on payments made through the Unified Payments Interface (UPI), based on different amount bands.

The RBI has released a discussion paper on charges in payment systems seeking public feedback through email on or before October 3, 2022.

“The focus of RBI’s initiatives in the payment systems has been to ease frictions which may arise from systemic, procedural or revenue-related issues. While there are many intermediaries in the payments transaction chain, consumer complaints are generally about high and non-transparent charges,” RBI said in a statement.

Stating that charges for payment services should be reasonable and competitively determined for users while also providing an optimal revenue stream for the intermediaries, the RBI said to ensure this balance, it was considered useful to carry out a comprehensive review of the various charges levied in the payment systems by highlighting different dimensions and seeking stakeholder feedback.

The discussion paper covers 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 Unified Payments Interface (UPI) and various payment instruments such as debit cards, credit cards and Prepaid Payment Instruments (PPIs).

“At this stage, it is reiterated that the RBI has neither taken any view nor has any specific opinion on the issues raised in this discussion paper,” the central bank said.

Based on the feedback, the RBI said it would set policies and decide on the intervention strategies.

Currently, no cost is incurred by users or merchants in the case of payments made through UPI.

The RBI has asked that if UPI transactions are charged, then should the merchant discount rate (MDR) be imposed based on the transaction value or should a fixed amount be charged as MDR irrespective of the transaction value?

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