Traders body writes letter to Finance Minister Nirmala Sitharaman, RBI against charges on digital payments
Brijesh Goyal, the chairman of the Chamber of Trade and Industry (CTI) said the trader’s body wrote a letter to Union Finance Minister Nirmala Sitharaman and the Reserve Bank of India (RBI) against the preparations made to levy charges on digital payments.
According to the CTI, India has joined the list of most digital payment countries with a major part of the population making payments through Unified Payments Interface (UPI).
However, the RBI has now started work on the process of levying charges on the payment and sought public opinion in this regard. Citizens can send in their idea by filling out the form or sending it to the official mail address of RBI by October 3, 2022.
Brijesh Goyal said the CTI believes that there should not be any kind of fee on digital payment as Prime Minister Narendra Modi himself campaigned for the adoption of the online payment mode under ‘Digital India’. He said, “PM Modi himself launched the ‘BHIM’ UPI app. Many companies like Google Pay, Paytm, PhonePe also started offering UPI services. Now people don’t have to go to the bank.”
Goyal opposed the idea of imposing charges on digital payments and said doing so will affect transactions and people will be forced to stand in line at ATMs and banks again.
CTI general secretary Vishnu Bhargava said that traders have also accepted UPI and digital mode and lakhs of transactions take place everyday. He said many traders are worried and levying charges would mean that they have to return to the old cash mode of transactions again.
According to the CTI, the discussion paper released by the RBI covers all the fees related to payment systems such as Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT), Real Time Gross Settlement (RTGS) system and Unified Payments Interface (UPI) and various payment instruments. The RBI also said that the feedback received in the form of debit cards, credit cards and prepaid payment instruments (PPIs) will be used in formulating policies.
The CTI said India has a huge mobile phone user base of around 120 crores. Among them, 75 crore people have smartphones. There are 450 million feature phone users who prefer UPI payments.
According to the data by the National Payments Corporation of India, 338 banks are working on the UPI system. About 50 percent of transactions are happening through UPI with an amount less than Rs 200.
The CTI has been pleading for two years that the charges on digital transactions should be completely abolished. At present, there is a charge of 1 percent on debit cards and 1 to 2 percent on credit cards.
The traders’ body demanded that the government pay the fees to the banks through subsidies. It said the government can reduce the cost of printing currency if it does not levy charges on digital payments and pays the banks fees as subsidies.