The Reserve Bank of India (RBI) is set to form a panel to study the charges on digital payments. RBI Governor Shaktikanta Das has revealed as part of the monetary policy announcement on 8th December, 2021, that it will release a discussion paper on charges on digital payments in India.
RBI will also launch a unified payments interface (UPI)-based payment products for feature phones, leveraging on innovative products from the RBI’s Regulatory Sandbox on Retail Payments. It will also help make the process flow for small value transactions simpler through a mechanism of ‘on-device’ wallet in UPI applications.
Further, it has also proposed to enhance the transaction limit for payments through UPI for the Retail Direct Scheme for investment in G-secs and Initial Public Offering (IPO) applications from Rs 2 lakh to Rs 5 lakh. Das believes that it will help deepen the UPI payment segment and ease the transactions even further.
Regarding this, RBI will release a discussion paper on various charges in the payment system which includes cards, wallets and UPI, Das said. One of the long-standing demands of the UPI players in India is the imposition of merchant discount rate (MDR) on these transactions, which will allow the facilitators to make money on it.
However, currently, any digital payments player including Paytm, Google Pay and PhonePe makes no money on UPI-based payments as they are not allowed to charge any commission on it. Although the same players can charge on other non-UPI digital transactions.
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