The government’s move to lift the legal restriction on banks and platforms from imposing a charge or merchant discount rate (MDR) on UPI transactions, hitherto free, has generated a lot of debate and fears that consumers will be burdened with the fees. The Payments Council of India, an industry body representing non-banking payment industry players, on Friday released a set of FAQs, reiterating FM Nirmala Sitharaman’s assertion that consumers will not have to pay a fee.Will I have to pay a fee to use UPI?No. UPI has always been free for consumers since its launch in 2016. Every Indian can continue making instant digital payments without paying any transaction charges.Will small shopkeepers or kirana stores be charged for accepting UPI?No. Small merchants are not required to pay any charges (MDR) to accept UPI payments. UPI was designed to make digital payments accessible for even the smallest businesses across India.Why is there a discussion around UPI charges now?UPI has evolved from a new payment platform into the world’s largest real-time payment system. As the ecosystem continues to expand, discussions are taking place on how to sustainably support the infrastructure that enables billions of secure transactions every month.Who built and continues to invest in UPI?For nearly 10 years, banks, payment companies, fintechs, NPCI and RBI have collectively invested in technology, cybersecurity, fraud prevention, innovation and customer support to build one of the safest and most reliable payment systems in the world. These investments continue every day to keep UPI secure, resilient and available 24×7.If UPI is free, who bears the cost of operating it?These costs are currently borne by ecosystem participants, including banks and payment service providers who continue to invest so consumers can enjoy a safe, secure and seamless payment experience.Would consumers have to pay if large merchants pay for payment acceptance?No. Merchant service charges, where applicable, are commercial arrangements between merchants and payment service providers. They do not mean that consumers pay to use digital payments. Across the world, merchant service charges are a standard feature of digital payment ecosystems, while consumers continue to enjoy convenient and secure digital payment experiences.Why is sustaining the UPI ecosystem important?As transaction volumes continue to grow, sustained investment in security, resilience, innovation, fraud prevention and infrastructure will remain essential.
