HYDERABAD: The Reserve Bank of India (RBI) has proposed charges for Unified Payments Interface (UPI) for fund transfers. However, the apex bank seeks public opinion and took to Twitter to know what the users think about levying charges for UPI transactions.

They released a discussion paper seeking feedback from stakeholders on imposing a charge on transactions made through payment systems.

"The discussion paper covers all aspects relating to charges in payment systems, such as Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT) system, Real Time Gross Settlement (RTGS) system and Unified Payments Interface (UPI)] and various payment instruments like debit cards, credit cards and Prepaid Payment Instruments (PPIs), etc. The feedback received would be used to guide policies and intervention strategies," RBI said.

The RBI asked for feedback and suggestions before October 3.

What are the current charges in payment systems?

Currently, no cost was incurred by users or merchants in the case of payments made through UPI, making it the most preferred mode of payment in India.

Charges on debit cards depend on the amount, bank and mode used to confirm transactions (for example, if a PIN is entered instead of a signature, there may be certain charges), while charges on credit card transactions depend on the banks.

Under IMPS, there was no service charge on transactions up to Rs 1,000. From Rs 1,001 to Rs 10,000, charge of Rs 2 plus GST was applicable, transaction of Rs 10,001 to Rs 1 lakh attracts Rs 4 plus GST fees and for amounts above Rs 1 lakh to Rs 2 lakh Rs 12 plus GST was applied.

What are the key points included in the discussion paper?

The RBI said in the discussion paper the UPI, as a funds transfer system, was like IMPS. Therefore, the charges in UPI needed to be similar to charges in IMPS for fund transfer transactions. A tiered charge could be imposed based on the different amount bands.

The RBI asked that if UPI transactions were charged, then should the Merchant Discount Rate (MDR),the rate charged to a merchant for payment processing services on various payment instruments, be imposed based on the transaction value or should a fixed amount be charged as MDR irrespective of the transaction value.It also sought feedback on whether the RBI should decide on the charges or the market, if charges were introduced at all.

For a person-to-merchant (P2M) transaction of Rs 800 on UPI, collectively, the stakeholders incur Rs 2 for processing the transaction, the RBI has explained.

What is the public opinion on the discussion paper for pay-to-pay?

The RBI tweeted about the discussion paper on August 17 after which the public turned to twitter to express their opinion.

While a very few people supported the charges, most of them opposed the possibility of levying charges on UPI payments and other payment systems.

A user wrote "Cost of UPI payments upto Rs 50,000, any number of times in a month from an acc should be nil. Pl refrain from charging upi and Dr card Pmt. It will backfire in every way. Govt is already benefiting hugely from it. Costs are also offset."

Users also wrote that if charges were levied, traders would indefinitely unite for strikes against the decision and some said that people would shift back to using cash, destroying the idea of a 'digital India'.

Use the email below to give your feedback on the discussion paper:

dpssfeedback@rbi.org.in