Rationalisation of digital transaction charges on cards
In a bid to make digital transaction more affordable, RBI governor Shaktikanta Das on Wednesday proposed to issue a discussion paper on charges involved in various digital payment channels such as credit/debit cards, wallets and UPI, and also enhance the transaction limit for UPI payments for IPO applications and RBI's Retail Direct Scheme to Rs 5 lakh from Rs 2 lakh.
Das felt that the charges "should be reasonable and should not become a deterrent in the adoption of digital payments."
The discussion paper "will also seek feedback on issues related to convenience fee, surcharging, etc, and the measures required to make digital transactions affordable to users and economically remunerative to the providers. The paper will be released in a month's time," said the central bank chief.
The RBI governor also made the announcement to enhance the transaction limit to Rs 5 lakh from Rs 2 lakh for UPI payments for the central bank's Retail Direct scheme as well as IPO offering applications.
"Over time, UPI has also become a popular payment option for initial public offerings (IPOs) since its availability from January 1, 2019. It is reported that IPO applications of Rs 2 to Rs5 lakh constitute approximately 10 per cent of subscription applications. The transaction limit in the UPI system was enhanced from Rs 1 lakh to Rs 2 lakh in March 2020. To further encourage the use of UPI by retail investors, it is proposed to enhance the transaction limit for payments through UPI for Retail Direct Scheme and IPO applications from Rs 2 lakh to Rs 5 lakh. Separate instructions to NPCI will be issued shortly," said the RBI.
The RBI also proposed a simpler process flow for small value transactions through an 'On-device' wallet in UPI app. This, the apex bnak said, will conserve banks' system resources, without any change in the transaction experience for the user.