Government may impose fee for funding UPI payment infra, know what will be its impact on you

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Charges for PPI based UPI Payments: In the coming days, the government may charge fees on UPI transactions. This will be for funding the infrastructure required for the UPI payment system. This thing has come to the fore in a study. The government may consider levying a uniform digital payment facilitation fee of 0.3 per cent on such transactions to finance the infrastructure required for the UPI payment system and ensure its financial viability. Indian Institute of Technology (IIT)-Bombay has suggested this in a study.

The study, titled ‘Charges for PPI based UPI payments – The Deception’, states that around Rs 5,000 crore can be raised in 2023-24 from a 0.3 per cent convenience fee.

Payments received by merchants should not be charged, even directly through UPI, says a study that analyzed the impact of the National Payments Corporation of India’s (NPCI) decision to levy an exchange fee on payments through mobile wallets. or through prepaid e-wallet.

NPCI has started the provision of deducting ‘intercharge’ fee of 1.1 percent of the payment amount from April 1, 2023, for making payments through UPI to shopkeepers. This will be applicable for prepaid wallet based UPI transactions.

Under the existing law, no bank or provider operating the UPI can directly or indirectly charge any person making or receiving payment through UPI. However, on several occasions banks and system providers have tried to interpret the UPI law in their own way. (with language input)

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