UPI Transactions: Reserve Bank of India Governor Sanjay Malhotra has indicated that UPI transactions will no longer be free forever. This service is currently free due to the subsidy given by the government, but it is not possible to run it for a long time. RBI now wants to make UPI financially self-reliant. This statement indicates that in the coming time, a nominal fee may be imposed on UPI, which may end the era of free digital transactions.
UPI Transactions: Customers and shopkeepers who make rapid transactions through UPI (Unified Payment Interface) should know that now free transactions are going to end. The reason for this is that Reserve Bank of India (RBI) Governor Sanjay Malhotra has given a big indication about ending the process of free transactions through UPI. He says that it is not possible to keep digital payments completely free in the long term. Currently, the government is giving subsidy to banks and payment service providers, so that UPI users continue to get free service. But, there is a high possibility of change in this system in future and people may have to pay charges for transactions.
Need to make UPI self-reliant
RBI Governor Sanjay Malhotra said during a program that it is very important to make the payment system financially self-reliant. He said, “No system can be sustainable unless its cost is recovered. Right now the government is bearing the expenses through subsidy, but this situation cannot last for long.”
Use of UPI is increasing rapidly in India
Use of UPI is increasing rapidly in India. UPI transactions have doubled in the last two years. Currently, more than 60 crore transactions are happening through UPI every day. The government kept it free till now to promote Digital India, but now RBI is eyeing to make this service self-reliant.
UPI users will have to pay charges
However, experts believe that even if a charge is levied on UPI transactions, it will be nominal, so that there is no burden on the common users. RBI’s intention is to make UPI completely financially sustainable, and not to make a profit from it. This will enable this service to continue uninterrupted in the future.
Government’s decision on MDR policy pending
Governor Sanjay Malhotra also clarified that the final decision on Merchant Discount Rate (MDR) is in the hands of the government. MDR is the fee that merchants pay to banks when customers pay at their stores by card or UPI. Currently, the government has kept the MDR on UPI and RuPay card transactions at zero, but there are possibilities of change in it.
Future of digital payments and government role
Sanjay Malhotra emphasized that the government and RBI want to make digital payments easy, safe and accessible. But, for this, a system has to be created in which there is economic participation of all stakeholders. He said, “Someone has to bear the cost.” This makes it clear that in future the government may reduce the subsidy and the users or the business class may have to bear the charges.
Free UPI service is in danger
This statement of the RBI governor clearly indicates that in the coming times, transactions through UPI may not be free. Although the charge may be nominal, but this change will be a big turn towards digital payments. All the parties involved will now have to be prepared for this possibility. It is also clear from the indication of RBI Governor Sanjay Malhotra that now you will have to pay money in any case when making payment through UPI. Otherwise, you will have to do cash transactions.
