This could sound weird but its gonna be true if RBI’s proposal is approved.

If you use UPI for every payment, be very careful. UPI has gained popularity in India like even in small shops people started using UPI payments.
It quickly became successful because of the quick payment procedure settlement, and one of the factors contributing to its success is that there is no price for the user to utilise this. However, this rule might alter soon. The Reserve Bank of India (RBI) is thinking about adding fees to UPI payments. If you utilise UPI for all transactions, you should be aware of the RBI’s new strategy.

Now the RBI is examining the possibility of recovering its large investment and operational expenditure in payments systems, regulating interchange and mandating per transaction fee for debit card, and introducing charges on UPI-based fund transactions.

UPI should consider charging the same as IMPS for fund transfer
The RBI’s latest proposal, titled “Discussion Paper on Charges in Payment System,” implies that the bank is thinking about adding fees to each financial transaction made through the UPI system. Its goal is to assess the possibility of recovering the cost of building and running the UPI infrastructure. According to the RBI, fund transfers made through UPI are equivalent to those made through IMPS (Instant Payment Service), so theoretically, UPI should charge the same fee as IMPS.

What the RBI has recommended in its proposal
The RBI proposed that UPI payments might be subject to a tiered charge based on various amount brackets. UPI is a fund transfer system that enables real-time money movement, according to the central bank. In contrast to the T+N cycle for cards, it enables fund settlement in real-time as a merchant payment system. The deferred net foundation of this agreement between the participating banks requires a PSO.
RBI intends to impose a fee on debit card transactions also.

If you can hear the voice,

Hamara desh ke, Digital India Hey!

then you are my friend too!

Let’s catch up on next disaster or Good news 😉

Finally after publishing this post,

Ministry of Finance tweeted this!

Note: The concerns of the service providers for cost recovery have to be met through other means. So it could be indirectly on us!