The Payments Council of India reassures that consumers and small merchants will not face charges for using UPI services, even as legislative debates consider fees for certain digital transactions, emphasising long-term funding and infrastructure security.
Consumers and small merchants are unlikely to face charges for using Unified Payments Interface services, even after the Lok Sabha passed a Bill that could allow fees on certain digital payments, the Payments Council of India said on Friday.
The industry body said UPI has remained free for consumers since its launch in 2016 and that the change under discussion is about how to fund the system’s long-term costs, not about charging ordinary users. It said kirana shops and other small merchants would also continue to accept UPI payments without paying the Merchant Discount Rate, the fee that can apply in some payment arrangements.
According to the Payments Council of India, the debate has centred on building a financially sustainable model for the infrastructure behind UPI, now one of the world’s largest real-time payment networks. The council said banks, payment companies, fintech firms, the National Payments Corporation of India and the Reserve Bank of India have invested for nearly a decade in technology, cybersecurity, fraud prevention, customer support and innovation to keep the platform running.
Finance Minister Nirmala Sitharaman said on Thursday that the Merchant Discount Rate applies to merchants, not customers, and argued that any such charge would help banks and fintech firms invest more in infrastructure and security. She also said the UPI and Services Steering Committee, headed by NPCI, has not yet decided on the issue.
The council added that even if merchant service charges are imposed on larger businesses in future, consumers would not be asked to pay for UPI transactions. It said such charges are commercial arrangements between merchants and payment service providers and are common in digital payments globally. The statement comes as India continues to expand a payment system used by hundreds of millions of people every day.
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