The Reserve Bank of India is organising a team to investigate digital payment charges, signalling that it is dissatisfied with the current system, which many say is excessively expensive considering the rise in transaction volume. It will add features to UPI transactions, which are presently the cheapest, which might limit the expansion of many fintech firms.
The Reserve Bank of India has announced the publication of a discussion paper on the various charges levied by banks and institutions for all forms of digital transactions made using credit cards, debit cards, wallets, and the Unified Payments Interface (UPI).
“A discussion paper on various payment system charges is recommended,” the regulator added, “to have a holistic picture of the issues involved and alternative measures to reducing the concerns in order to make digital transactions more inexpensive.”
Separately, the RBI stated that, based on innovative products from the RBI’s Retail Payments Regulatory Sandbox, it will develop UPI-based payment products for feature phone customers.
It will also help to simplify the process flow for small value transactions by allowing UPI applications to employ a “on-device” wallet mechanism. For the Retail Direct Scheme, it also proposed raising the transaction limit for payments made through UPI for G-sec investments and IPO applications from Rs 2 lakh to Rs 5 lakh.