The RBI has hinted that UPI will now be chargeable.

UPI will now be taxed: The Unified Payment Interface, or UPI, has brought about revolutionary changes in India’s payment ecosystem. While UPI transactions are currently free, the Reserve Bank of India has requested feedback from stakeholders on the possibility of imposing a tiered charge on them.

Discussion Paper by the RBIOn August 17, the Reserve Bank of India (RBI) issued a discussion paper on charges in payment systems in order to structure its policies and streamline the framework of charges for various payment services/activities in India. UPI, IMPS (Immediate Payment Service), NEFT (National Electronic Funds Transfer), RTGS (Real-Time Gross Settlement), and payment instruments such as debit cards, credit cards, and prepaid payment instruments are examples of such methods (PPIs).Based on the feedback received, the RBI intends to revise its policies and streamline the framework of charges for various payment services and activities in the country.

What did the RBI say?
UPI, as a funds transfer system, is similar to IMPS. As a result, it could be argued that UPI charges should be comparable to IMPS charges for fund transfer transactions. A tiered charge based on the different amount bands could be imposed. The RBI requested responses and recommendations from stakeholders by October 3 of this year.

The RBI has not issued any instructions on how to charge for UPI transactions. With effect from January 1, 2020, the government has mandated a zero-cost framework for UPI transactions. This means that UPI charges are nil for both users and merchants. Given that the goal of this discussion paper is to elicit general feedback, a few questions about which approach should be taken have been included. ”