Consumers already bearing UPI costs indirectly: RBI governor
RBI governor Sanjay Malhotra emphasized that the costs of UPI transactions are already subtly included in operations. He expressed it is premature to introduce explicit fees for merchants. The priority lies in enhancing the payment infrastructure and increasing utilization. Any fee implementation should consider potential effects on user engagement and ongoing investment, as consumers do…
NEW DELHI: RBI governor Sanjay Malhotra indicated that consumers are already bearing the cost of Unified Payments Interface (UPI) transactions, even if merchant fees are not directly charged. Speaking at a press conference, Malhotra stated that it is premature to discuss the idea of imposing merchant fees on UPI and the focus is on strengthening the payments infrastructure.
He emphasized that costs must be paid by someone, as the objective is to strengthen and make the infrastructure more efficient. Malhotra reiterated that the government's proposal to allow merchant fees on UPI transactions over Rs 2,000 is still in the early stages, and the current priority is to promote UPI usage significantly. He pointed out that the absence of fees has allowed banks to cede the payments-as-a-service space to fintech companies like PhonePe and Google Pay, which have become almost a duopoly.
The revenue generated through these companies' services is not easily visible to consumers, but it is ultimately a cost that they bear in some form. The RBI governor reiterated that the priority is to ensure sustained investment in UPI and the availability of revenue streams to support its growth.
Written by urgent.news from Times of India's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
