Payment aggregators popularised the Unified Payments Interface (UPI) but they have hardly earned any money from it, said an industry representative on Monday in response to a ministry statement that the government has no plans to “levy any charges” for the service.

“The concerns of the service providers for cost recovery have to be met through other means,” said the ministry on Twitter Sunday. It was responding to a (RBI) discussion paper suggesting that payments could be subject to a tiered charge based on various amount brackets.

Vishwas Patel, chairman of industry association Payments Council of India (PCI) and executive director of Infibeam Avenues, said payment aggregators have suffered a collective loss of over Rs 25,000 crores in the last four years in promoting and popularising digital payments, especially UPI, installing point of sale (Pos) terminals and QR codes.

Also Read: UPI records 6 billion transactions in July, highest ever since 2016

“…all the support money provided by the ministry has been appropriated by the banks only, (no single bank has even a significant single digit volume in UPI) … none of the payment aggregators or facility provider received anything,” he said on Twitter.

The ministry’s Twitter post said the government provided financial support for the digital payment ecosystem last year and has announced the same for the ongoing fiscal. In Financial Year (FY) 2021-22, the government allocated Rs 1,500 crore for “promotion of digital payments” that is used to reimburse the merchant discount rate (MDR) for RuPay debit card transactions, and BHIM- transactions up to Rs 2,000. For FY23, the union budget provided Rs 200 crore for promoting digital payments.

The RBI’s discussion’s paper last week sought feedback from stakeholders on the possibility of imposing a tiered charge on payments made through the UPI, based on different amount bands.

as a funds transfer system is like IMPS. Therefore, it could be argued that the charges in UPI need to be similar to charges in IMPS for fund transfer transactions. A tiered charge could be imposed based on the different amount bands,” said the discussion paper. Currently, no cost is incurred by users or merchants in the case of payments made through UPI. But, for a person-to-merchant (P2M) transaction of Rs 800 on UPI, collectively, the stakeholders incur Rs 2 for processing the transaction, the RBI has explained.

Payment industry participants have said they would welcome charges on UPI transactions, saying it would be positive for the industry and help banks build better infrastructure for digital payments.

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