New Delhi. India’s own digital payment system UPI has proved to be a big hit since its launch. One of the major reasons for this is that the payment is settled in a jiffy and there is no charge for it. However, in the coming times, there may be a change in the situation and people may have to pay charges instead of paying through UPI. The Reserve Bank has issued a ‘Discussion Paper on Charges in Payment System’ regarding this and has sought comments from the people on it.

In fact, the Reserve Bank is exploring options to recover the cost of the development of payment systems and infrastructure created for the settlement of payments. The paper states that UPI is also a fund transfer system like IMPS. Therefore, it can be argued that for UPI also charges should be levied on fund transfer transactions like IMPS. The Reserve Bank has said that different charges may be prescribed for different amounts.

According to the paper, UPI as a fund transfer system ensures the real-time transfer of money. At the same time, it also ensures real-time settlement as a merchant payment system. To ensure this settlement, PSOs and banks need to create adequate infrastructure so that transactions can be completed without any risk. Due to this additional cost is incurred on the system. RBI has further said, “There is no place for any argument for free service in any economic activity including payment systems unless it is for the good of the people and the welfare of the country.” But the question arises as to who will bear the huge expenditure involved in creating and operating such an infrastructure.

Along with UPI, the Reserve Bank has also sought comments from people regarding charges for debit card transactions, RTGS, NEFT, etc. The paper said that it would not be irrational if the Reserve Bank levies charges for debit card payment systems, RTGS payments, and NEFT payments, as huge investments have been made in creating infrastructure for these. It should not be seen as an attempt by the Reserve Bank to make money, but as an attempt to recover the cost of the development and operation of the system.

The central bank has said that in the case of RTGS also a huge investment has been made and it also costs to operate. In such a situation, if the Reserve Bank has imposed charges on RTGS payment, then it should not be considered a way of earning. RTGS is used for high-value transactions and is generally used by banks and large financial institutions. Should the Reserve Bank provide the service free of cost in such a system, in which large institutions are members? Similarly, with regard to NEFT, the paper states that even though such transactions can be classified as people-friendly and it has helped in digitizing payments, are there any charges on such payments even after some time of inception? Shouldn’t be recovered?