RBI governor Sanjay Malhotra issued a fresh clarification on Wednesday amid buzz that users would soon have to pay for UPI transactions. He maintained that ‘someone’ would have to pay in the longer run to maintain sustainability — noting that this did not necessarily mean ‘users’ would pay. Malhotra reiterated that government policies remained focused on expanding the adoption of the unified payments interface.
“Who pays is important, but not so important as someone footing the bill. For sustainability, whether collectively or individually, someone pays for the costs. The government is subsidising it…I never said that users will have to pay,” Malhotra clarified while addressing the post-Monetary Policy Committee press conference.
The UPI system is currently free for users — with the cost for maintaining the payment infrastructure behind the service borne by the government through subsidising banks and other stakeholders. The government follows a zero merchant discount rate policy — with UPI transactions generating no revenue. Industry players have repeatedly warned in recent years that the current model was financially unsustainable.
What had Malhotra said earlier?
“Payments and money are a lifeline. We need a universally efficient system. As of now, there are no charges on the UPI service. The government is subsidising various players such as banks and other stakeholders in the UPI payments system. Some costs have to be paid,” Malhotra told the Financial Express in late July.
He also noted that costs needed to be paid for any service to be truly sustainable — “whether collectively or by the user”. Malhotra also noted that the unprecedented scale of UPI operations had intensified strain on the backend infrastructure which is largely maintained by banks, payment service providers, and the National Payments Corporation of India.
Daily UPI transactions cross 700 million
Data from the NPCI indicated on Tuesday that daily UPI-based transactions had now crossed 700 million for the first time. The number of daily transactions has doubled over the past two years, even as growth slowed down in comparison to previous years.
(With inputs from agencies)