RBI proposes to make digital payments more affordable

New Delhi, Dec 8 (FN Agency) As charges for using various payment options such as credit card, debit card and pre-paid payment wallets vary and are at times unreasonable also, the Reserve Bank of India (RBI) on Wednesday decided to address the issue and make digital transactions more affordable. Announcing the bi-monthly monetary policy, RBI Governor Shaktikanta Das said that there have been some concerns on the reasonableness of various charges incurred by customers for digital payments through credit cards, debit cards, prepaid payment instruments (cards and wallets), Unified Payments Interface (UPI) and the like. “It is proposed to release a discussion paper on various charges in the payment system to have a holistic view of the issues involved and possible approaches to mitigating the concerns so as to make digital transactions more affordable,” he said.

The RBI Governor noted that concerted efforts by all stakeholders have led to a significant increase in digital payments in recent years. Commenting on RBI’s proposal, Anil Gupta, Vice President and Sector Head (Financial Sector Ratings) at ICRA said that payment charges across various payment systems vary, thereby influencing the usage. “Small ticket payments are preferred on systems with low charges, while high ticket payments are preferred on payment systems like credit cards even at higher charges. Harmonisation of payment charges at lower rates across systems could spur up the overall digital payment volumes further, thereby making it beneficial for users as well as service providers,” he said. Meanwhile, the RBI on Wednesday proposed to launch UPI-based payment products for feature phone users and make the process flow for small value transactions simpler through a mechanism of ‘on-device’ wallet in UPI applications. It also decided to increase transaction limit for payments through UPI to Rs 5 lakh from Rs 2 lakh now for investing in government securities (G-Secs) under the newly-launched Retail Direct Scheme and Initial Public Offerings (IPOs).