Trade associations complain in a letter to the RBI and Finance Minister Nirmala Sitharaman about fees for digital payments
The Chamber of Trade and Industry (CTI), according to its chairman Brijesh Goyal, issued a letter to the Reserve Bank of India (RBI) and Union Finance Minister Nirmala Sitharaman objecting to the plans made to impose fees on digital payments.
With a large portion of the population using the Unified Payments Interface, India has joined the list of nations with the most digital payments, according to the CTI (UPI).
However, the RBI has recently begun work on the procedure for adding fees to the payment and has consulted the public on the matter. By October 3, 2022, citizens may submit their ideas by filling out the form or mailing them to RBI's corporate address.
According to Brijesh Goyal, the CTI feels that there should be no fees associated with digital payments because Prime Minister Narendra Modi personally promoted the use of online payment methods as part of "Digital India." "PM Modi himself introduced the BHIM UPI software," he declared. Many businesses, including Google Pay, Paytm, and PhonePe, began providing UPI services. People no longer need to visit the bank.
Goyal criticised the concept of adding fees to digital payments, claiming that doing so would have an impact on transactions and make people to wait in line once more at ATMs and banks.
According to CTI General Secretary Vishnu Bhargava, thousands of transactions happen every day and traders have accepted UPI and the digital approach. He claimed that many traders are concerned and that levying fees will force them to resume using the old cash system.
The Unified Payments Interface (UPI), Real Time Gross Settlement (RTGS), Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT), and numerous payment instruments are all covered in the discussion paper the RBI produced, according to the CTI. The RBI also stated that the opinions expressed through prepaid payment instruments (PPIs), debit cards, and credit cards would be taken into consideration while drafting policy.
According to the CTI, India has a sizable mobile phone user base of about 120 crore people. 75 crore of them are smartphone users. UPI payments are preferred by 450 million feature phone users.
338 banks are working on the UPI system, according to information provided by the National Payments Corporation of India. UPI is used for transactions with a value of less than Rs 200 in about 50% of cases.
The CTI has been arguing for two years that all fees associated with digital transactions should be eliminated. Currently, debit cards have a 1 percent fee and credit cards have a 1 to 2 percent fee.
The traders' organisation demanded that the government use subsidies to pay the fees to the banks. It stated that if the government does not impose fees on digital payments and pays the banks' costs as subsidies, the cost of producing money can be reduced.