UPI Charges May Return For High-Value Transactions: Govt Weighs Two Options

The
Ce t e
is
exami i g
ways
to
make
the
U ified
Payme ts
I te face
(UPI)
ecosystem
fi a cially
sustai able
as
the
cost
of
u i g
the
digital
payme ts
etwo k
co ti ues
to
outpace
gove me t
suppo t.

The
Depa tme t
of
Fi a cial
Se vices
(DFS),
i
a
espo se
to
the
Pa liame ta y
Sta di g
Committee
o
Fi a ce
dated
July
17,
said
it
was
co side i g
two
app oaches:
b i gi g
back
the
me cha t
discou t
ate
(MDR)
fo
select
high-value
t a sactio s
o
me cha ts,
a d
i t oduci g
a
tie ed
i ce tive
system
that
would
g adually
educe
gove me t
suppo t
ove
the
ext
few
yea s.

The
depa tme t
said
the
optio s
we e
bei g
exami ed
i
view
of
the
sustai ability
of
UPI
a d
the
fi a cial
bu de
o
the
gove me t.

Rs
2,000
C o e
Allocatio
Vs
Rs
20,700
C o e
I dust y
Cost

The
issue
of
UPI’s
fi a cial
sustai ability
was
highlighted
by
the
pa liame ta y
pa el
i
a
epo t
tabled
o
Wed esday.

The
committee
said
the
gove me t
had
allocated
Rs
2,000
c o e
to
i ce tivise
UPI
t a sactio s
a d
compe sate
fo
losses
a isi g
f om
ze o
MDR.
The
i dust y’s
estimated
ope atio al
cost,
howeve ,
sta ds
at
Rs
20,700
c o e,
epo ted
Busi ess
Sta da d.

The
pa el
said
the
existi g
i ce tive
cove s
o ly
a ou d
11
pe
ce t
of
the
i dust y’s
actual
costs
a d
about
14
pe
ce t
of
the
pote tial
MDR
collectio s.

It
also
wa ed
that
co ti ued
depe de ce
o
gove me t
suppo t
could
affect
payme t
se vice
p ovide s’
ability
to
i vest
i
cybe secu ity,
f aud
p eve tio
a d
etwo k
i f ast uctu e.

The
committee,
chai ed
by
Lok
Sabha
membe
Bha t uha i
Mahtab,
said
a
sustai able
eve ue
mecha ism
was
ecessa y
to
e su e
that
UPI
could
co ti ue
to
expa d
without
placi g
a
pe siste t
st ai
o
the
gove me t
excheque .

Also
Read
:

RBI
P oposes
New
Loa
I te est
Rate
F amewo k:
Key
Rules
Fo
NBFCs
A d
Bo owe s

What
Could
Cha ge
Fo
UPI
Me cha ts?

O e
of
the
optio s
bei g
exami ed
is
the
esto atio
of
MDR
fo
t a sactio s
o
me cha ts
c ossi g
a
specified
high-value
th eshold.

MDR
of
up
to
0.30
pe
ce t
of
the
t a sactio
value
was
applicable
to
UPI
me cha t
t a sactio s
u til
2019.
The
Ce t e
i t oduced
ze o
MDR
o
all
UPI
t a sactio s
i
Ja ua y
2020
to
p omote
digital
payme ts
a d
e cou age
a
shift
f om
cash.

The
gove me t
has
so
fa
i dicated
that
a y
futu e
MDR
would
be
limited
to
a
small
catego y
of
me cha t
t a sactio s
above
a
specified
th eshold.
It
would
also
be
cha ged
at
a
omi al
ate,
well
below
the
ates
applicable
to
debit
a d
c edit
ca d
t a sactio s.

The
UPI
a d
Se vices
Stee i g
Committee,
headed
by
the
Natio al
Payme ts
Co po atio
of
I dia
(NPCI),
will
dete mi e
the
st uctu e
of
MDR
a d
the
th eshold
at
which
it
could
apply.

Gove me t
Suppo t
Could
Be
Phased
Out

The
seco d
optio
u de
co side atio
is
a
tie ed
i ce tive
st uctu e
u de
which
gove me t
suppo t
could
be
educed
g adually
ove
the
ext
few
yea s.

The
move
comes
as
UPI’s
p ojected
scale
co ti ues
to
expa d.
The
pa liame ta y
committee
said
the
platfo m
could
p ocess
up
to
150
billio
t a sactio s
a
mo th
a d
add
600
millio
ew
use s.

The
pa el
said
that
although
statuto y
p ovisio s
ow
allow
calib ated
MDR
o
high-value
t a sactio s,
delays
i
otifyi g
a d
impleme ti g
the
f amewo k
could
leave
payme t
se vice
p ovide s
depe de t
o
subsidies
that
do
ot
adequately
cove
thei
costs.

Pa liame t
ea lie
this
week
passed
the
Taxatio
a d
Othe
Laws
(Ame dme t)
Bill,
2026,
ame di g
the
Payme t
a d
Settleme t
Systems
Act,
2007.
The
ame dme t
e ables
the
gove me t
to
specify
th ough
otificatio
which
elect o ic
payme t
modes
ca
co ti ue
to
eceive
statuto y
p otectio
f om
cha ges.

Howeve ,
the
gove me t
has
ot
yet
allowed
MDR
to
be
levied
o
UPI.

Co sume s
To
Remai
Outside
A y
UPI
Cha ge

Fi a ce
a d
Co po ate
Affai s
Mi iste
Ni mala
Sitha ama
told
the
Rajya
Sabha
o
Mo day
that
a y
futu e
fee
o
digital
payme ts
would
apply
o ly
to
a
limited
catego y
of
me cha t
t a sactio s
above
a
high
th eshold.

She
said
co sume s
would
co ti ue
to
use
UPI
fo
i sta t
digital
payme ts
without
payi g
a
t a sactio
cha ge.

The
pa liame ta y
committee
said
establishi g
a
viable
eve ue
mecha ism
would
be
impo ta t
fo
e su i g
the
lo g-te m
fi a cial
sustai ability
of
the
UPI
ecosystem
without
co ti uously
i c easi g
the
p essu e
o
the
gove me t
excheque .

Also
Read
:& bsp;Ship ocket
IPO
GMP
Today:
Issue
Fully
Subsc ibed
O
Day
2,
What
Should
I vesto s
Do?

Go to Sou ce