4 days ago
- Business
- New Indian Express
UPI isn't free even now, someone covering the cost already: RBI Governor Malhotra
MUMBAI: Reserve Bank governor Sanjay Malhotra has said that even as the all-popular unified payments interface (UPI) remains free for users, someone is already covering the cost, adding that the government will ultimately decide who bears the operational expenses.
Addressing reporters at the customary post-policy presser here Wednesday when the RBI-MPC maintained the status quo on rates, the governor was responding to a query on his earlier statement on the issue.
Asked whether charges such as the merchant discount rate (MDR) can be passed on to consumers, the governor clarified, 'I never said that UPI cannot stay free forever. What I said was there are costs (associated with UPI transactions), and they need to be paid for by someone."
'The question was whether charges like MDR would be passed on to consumers. I responded by saying that there are costs involved," he said about his previous statement at an industry event last week in the city.
'There are costs, and these costs have to be paid by someone. Who pays is important but not as important as the fact that someone is footing the bill,' the governor said, adding, 'My sense is that it is not free even now, and someone is paying for it. The government is subsidising it, but somewhere, the costs are being paid.'
Introduced in 2016 by the RBI-run National Payments Corporation, the UPI currently accounts for about 80% of retail digital payments in the country and is a global success when it comes to digital payments. On average, UPI handles 30 crore transaction a month, which in July was 31 crore.
