Finance Ministry allays worries on UPI charges, says providers may seek ‘other means’

After the Reserve Bank of India (RBI) came out with a discussion paper last week on charges in payment systems, the Finance Ministry on Sunday clarified that there is no consideration in the government to levy any charges for Unified Payments Interface (UPI) services.

In a discussion paper released on Wednesday, the RBI had asked stakeholders if the merchant discount rate (MDR), a fee paid by merchants to acquiring banks, should be brought back for UPI transactions. MDR on UPI transactions has been a long-standing demand of the payments industry.

Most other modes of digital retail payments attract a charge on transactions. Currently, the government has mandated a “zero-charge framework” for UPI transactions, with effect from January 1, 2020.