The government is preparing to make major changes to UPI payments. Finance Minister Nirmala Sitharaman has introduced a bill in Parliament to amend the Payment and Settlement Systems Act. This bill aims to create a legal framework for imposing fees on certain UPI transactions in the future. However, the government has not immediately implemented any fees. Furthermore, no final decision has been made on this matter.

Who will be affected by this?

According to reports, this proposed law will not impact ordinary consumers. One of the proposals under consideration by the government is to impose a fee of 0.3% to 0.5% on UPI transactions exceeding ₹2,000. This rule will only apply to large businesses with an annual turnover of over ₹1.5 crore, and only those businesses are proposed to be subject to this fee. Small shopkeepers, grocery stores, and small traders may be excluded from this policy entirely.

Why is there a demand to impose fees?

According to a report in India Today, citing digital payments industry experts, offering UPI services without fees is making it difficult to build a sustainable business model. Payment companies say that because there are no fees, they generate no revenue and, as a result, are unable to make significant investments in new technology, security systems, or other areas.

If this fee is imposed on UPI transactions, it could create a significant revenue
opportunity for fintech companies like Paytm and Pine Labs. It's estimated that these companies could generate between ₹5,000 crore and ₹10,000 crore in revenue annually through this fee.

PC: ABP News