UPI Charges: RBI Governor Sanjay Malhotra has indicated that payments through UPI will not always be free. Speaking at a media event, he said that currently the UPI system works without any charges, that is, users do not have to pay any charges for it.
However, the government gives subsidy to banks and other stakeholders so that the UPI system can run the real time payment infrastructure smoothly. He said that India is committed to making digital payments safe and better, but the stability of the infrastructure cannot be ignored, so in such a situation, obviously someone will have to pay the cost.
Payment through UPI is growing rapidly
The RBI governor has mentioned the expenses related to UPI at a time when it is growing at a tremendous speed. In just two years, the number of transactions done through UPI has almost doubled from 31 crores to over 60 crores per day. This rapid growth has put pressure on the backend infrastructure, most of which is maintained by banks, payment service providers and the National Payment Corporation of India (NPCI). The government does not get any revenue on transactions through UPI because the merchant discount rate (MDR) is zero. Due to this, industry players believe that this model will not be financially viable for long.
There was also a mention about the reduction in rates
Along with the possibility of charges on UPI payments, the RBI governor also mentioned that a rate cut is possible. He said that monetary policies are decided according to the future, so the current inflation figures are less important, but what the situation will be in the next 6 to 12 months is more important. Currently the inflation rate is 2.1%. He said that in just two months, a 50 bps cut in the repo rate has completely translated into new loans and even though credit growth is slower than last year, it remains above the 10-year average. Regarding digital currency, he said that the RBI is still cautious about it. A committee of RBI representatives is testing its impact.
