UPI stays free: Payment Council assures no charges for users, small merchants
GS3Economy · S&T · Environment · Security· Monetary policy, RBI & banking· Prelims + Mains·
Why in news
The Payments Council of India clarified that UPI transactions will remain free for consumers and small merchants despite legislative amendments to the Payment and Settlement Systems Act, 2007.
Background
The Payments Council of India stated that while the Payment and Settlement Systems Act, 2007 amendment allows for charges, users and small merchants are exempt from fees. Finance Minister Nirmala Sitharaman noted that any future Merchant Discount Rate (MDR) would be aimed at infrastructure investment and security.
Facts for Prelims
- Act / BillPayment and Settlement Systems Act, 2007: The primary legislation governing electronic payment systems in India.
- FactUPI (Unified Payments Interface): A real-time payment system developed by NPCI.
- BodyPayments Council of India: A body overseeing the regulatory framework of payment systems.
- FactMDR (Merchant Discount Rate): A fee charged by a merchant to a customer for processing a credit/debit card or UPI transaction.
For Mains
Q. Discuss the significance of the Unified Payments Interface (UPI) in deepening financial inclusion in India and the challenges of sustaining its infrastructure.
Dimensions to cover in your answer
- financial inclusion
- infrastructure sustainability
- security and innovation
- digital public infrastructure (DPI)
Keywords: financial inclusion · digital public infrastructure · monetary policy · transactional efficiency · infrastructure investment
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