RBI Governor Sanjay Malhotra said that costs have to be paid by someone for the sustainability of the public infrastructure for digital payments to run the UPI system, but this may not fall on general consumers.
He was responding to a question, at a press conference here, on how the RBI plans to impose a merchant discount rate (MDR) or commission on UPI transactions.
“It is very premature to say something on it, let’s wait and watch for the development, ultimately it is the consumers who pay but it may not be the general consumers,” he remarked.
The RBI Governor had also said last month that digital infrastructure costs have to be covered, but there is no formal framework or proposal to charge everyday users.
The Finance Ministry has proposed legislative changes to the Payment and Settlement Systems Act which is aimed to allow potential flexibility for future merchant charges on high-value UPI transactions above ₹2,000. However, regular consumer UPI payments would remain free, according to senior officials.
Government officials said that over 90 per cent of the transactions that include daily purchases of milk, vegetables and groceries will not attract an MDR charge.
At present credit and debit card purchases come under MDR but most merchants to do not pass on the cost to consumers.
The finance ministry proposed amending section 10A of the Payment and Settlement Systems Act, removing rigid zero-charge mandates to allow future government notification on transaction fees.
The Bill introduced in the Lok Sabha changes the legal framework, giving the government the flexibility to decide in the future which digital payment modes should remain exempt from charges and which could attract MDR.
Currently, the law prevents banks and payment service providers from levying charges on notified payment modes such as UPI and RuPay debit cards.
The amendment would remove this blanket statutory protection and pave the way for the government to notify which electronic payment modes will remain exempt from charges and which could attract MDR.
