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The Reserve Bank of India (RBI) has released a discussion paper seeking feedback on charges related to Unified Payments (UPI) Interface and credit cards among others.
“Charges for payment services should be reasonable and competitively determined for users while also providing an optimal revenue stream for the intermediaries,” the RBI stated.
Feedback may be provided in respect of questions raised therein, including other relevant suggestions, through email on or before October 3, 2022.
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It is looking into ways to recoup some of the costs associated with its significant investment and operational expenditure in payments systems, including regulating interchange and requiring a per-transaction fee for debit card transactions as well as imposing fees on fund transfer transactions based on the Unified Payments Interface (UPI).
The RBI’s discussion paper on fees in payment systems, which was published on Wednesday, aims to organise its policies and simplify the framework of fees for various payment services or activities, including UPI, IMPS (Immediate Payment Service), NEFT (National Electronic Funds Transfer), RTGS (Real-Time Gross Settlement), and payment instruments like debit cards, credit cards, and prepaid payment instruments (PPIs).
“At this stage, it is reiterated that the RBI has neither taken any view nor has any specific opinion on the issues raised in this discussion paper,” RBI said.
RTGS includes the use of public funds, RBI can legitimately claim reimbursement for its significant investment and operating costs. Furthermore, the Real Time Gross Settlement (RTGS) fees levied by the RBI are not meant to be a source of income.
Discussion paper released by the Central bank says, “While there are many intermediaries in the payments transaction chain, consumer complaints are generally about high and non-transparent charges”.
The central bank, which oversees National Electronic Funds Transfer (NEFT) as well, has invested in building and running the infrastructure. Therefore, even though RBI may not be motivated by profit when operating NEFT, the report noted that the recovery of fair costs could be justifiable.
Copy of press release issued by RBI:
FAQs on discussion Paper on Charges in Payment Systems
How to provide the feedback on discussion paper released by RBI on Charges in Payment Systems?
Feedback may be provided in respect of questions raised therein, including other relevant suggestions, through email at the Email ID dpssfeedback@rbi.org.in.
What is the last date to provide feedback on discussion paper released by RBI on Charges in Payment Systems?
Feedback may be provided in respect of questions raised therein, on or before October 3, 2022.
What is the difference between NEFT and RTGS?
The Real Time Gross Settlement method is mostly used for transactions of high value. The minimum amount of RTGS transfer is Rs. 2 lacs. NEFT is a one-to-one payment facility while the minimum transaction value is Rs. 1. While NEFT transfer can take up to 2 hours to get settled, RTGS offers real-time fund transfer.
What is UPI?
With the use of the Unified Payments Interface (UPI), customers can link several bank accounts in a single smartphone app and send money without giving their IFSC or account numbers.
In this real-time payment system, monies are instantly credited in real-time. UPI was introduced to the public on 11th April 2016.
What is the maximum limit of fund transfer through UPI?
Rs. 1,00,000 is the maximum limit allowed through UPI. A customer can do a total of 10 UPI transactions in a day.
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