Not the right time to make digital payments ‘chargeable’: Nirmala Sitharaman
New Delhi:
Union Finance Minister Nirmala Sitharaman on Friday said that the central government believes that this is not the right time to make digital payments chargeable.
Speaking at an event, Ms Sitharaman said, “We see digital payments as a public good. People should be able to access it freely so that digitization of the Indian economy is attractive. Through this, we achieve a level of transparency that is so needed.”
“Therefore, we still feel that this is not the right time to make it chargeable. We are moving towards more and more open digital transactions, digitization and platforms that can enable great reach. RBI’s recommendation is a is for working paper and gives to working paper. Where is it,” the minister said.
Ms Sitharaman’s statement came against the backdrop of the Reserve Bank of India (RBI) seeking feedback from the public on various changes proposed in the payment system, including the possibility of levying tiered charges on transactions done through the Unified Payments Interface (UPI).
However, the Indian government last week announced that it would not levy any charges on UPI (Unified Payments Interface) services.
As announced in the Statement on Developmental and Regulatory Policies dated December 08, 2021, the Reserve Bank of India (RBI) has issued a discussion paper on “Charges in Payment Systems” for public response, RBI said in a statement. Told. The discussion paper was released on 17 August.
The focus of RBI’s initiatives in payment systems is to reduce friction arising out of systemic, procedural or revenue related issues.
While many intermediaries exist in the payment transaction chain, consumer complaints are generally about high and non-transparent fees.
Fees for paid services should be fair and competitively determined for users, while also providing an optimal revenue stream for intermediaries.
It was found useful to review the various charges levied in payment systems by highlighting the various dimensions and getting feedback from the stakeholders.
The RTGS and NEFT payment systems in India are owned and operated by RBI.
Systems like IMPS, RuPay, UPI, etc. are owned and operated by National Payments Corporation of India (NPCI), a non-profit organization promoted by banks.
Other entities, such as card networks, PPI issuers, etc., are profit-maximizing private entities.
Notably, the number of digital transactions in July was the highest since 2016. According to data released by the National Payments Corporation of India (NPCI), UPI reported 6.28 billion transactions amounting to Rs 10.62 trillion.