RBI moves to lower cost of digital payments, take UPI to more users

The Reserve Bank of India is set to form a panel to study the charges on digital payments which signals that it is not comfortable with the current structure which many believe is expensive given the surge in volume of transactions. It would add features to UPI transactions, which are at the lowest price point, that could further erode the prospects of many players.

The RBI said it will release a discussion paper on various charges levied by banks and institutions for all kinds of digital transactions through credit cards, debit cards, wallets and Unified Payments Interface (UPI).

“It is proposed to release a discussion paper on various charges in the payment system to have a holistic view of the issues involved and possible approaches to mitigating the concerns to make digital transactions more affordable,” the regulator said.

Separately, the RBI also said that it will launch UPI-based payment products for feature phone users, leveraging on innovative products from the RBI’s Regulatory Sandbox on Retail Payments.

It will also help make the process flow for small value transactions simpler through a mechanism of ‘on-device’ wallet in UPI applications. It also proposed to enhance the transaction limit for payments through UPI for the Retail Direct Scheme for investment in G-secs and Initial Public Offering (IPO) applications from Rs 2 lakh to Rs 5 lakh.