Nirmala Sitharaman says the time is not right to make digital payments chargeable
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New Delhi: Nirmala Sitharaman, the Union Finance Minister, stated on Friday that the central government does not think it is appropriate to charge for digital payments at this time.
Sitharaman, speaking at an event said, "We see digital payment as the public good. People should be able to access it freely so that the digitisation of the Indian economy becomes attractive. Also through digitisation, we achieve a level of transparency which is so required."
"Therefore, we still think it is not the right time to make it chargeable. We are more and more pushing toward open digital transactions, digitisation and platforms which can enable great access. The RBI's recommendation is to a working paper and lets the working paper where it is," the Minister added.
The Reserve Bank of India (RBI) was seeking public input on a number of proposed changes to the payments system, including the prospect of charging tiered fees on transactions made through the Unified Payments Interface (UPI), at the time Sitharaman made her statement, ANI reported.
But this week, the Indian government declared that it will not charge for UPI (Unified Payments Interface) services.
The Reserve Bank of India (RBI) released a discussion paper on "Charges in Payment Systems" for public comment, as stated in the Statement on Developmental and Regulatory Policies dated December 8, 2021, RBI said in a statement. On August 17, the discussion paper was made public.
RBI actions in the payment systems have been geared toward reducing frictions that may be brought on by systemic, administrative, or revenue-related concerns. Despite the fact that there are multiple middlemen in the payment transaction chain, consumer complaints are typically about high and non-transparent fees.
Payment service fees should be affordable and competitively set for users while also offering the intermediaries the best possible revenue stream. It was thought helpful to do a thorough analysis of the numerous fees assessed in the payment systems, highlighting different aspects and requesting stakeholder input, in order to ensure this balance.
The RBI owns and manages the RTGS and NEFT payment systems in India. The National Payments Corporation of India (NPCI), a not-for-profit organisation supported by banks, owns and manages systems like IMPS, RuPay, UPI, and others. The other organisations, such as card networks and PPI providers, are profit-maximizing private organisations.
Notably, in July, there were more digital transactions than at any time since 2016. According to information made available by the National Payments Corporation of India, UPI reported 6.28 billion transactions totalling Rs. 10.62 trillion (NPCI).
