Brijesh Goyal, President of the Chamber of Commerce and Industry (CTI), said the trader’s body had written a letter to Union Finance Minister Nirmala Sitharaman and the Reserve Bank of India (RBI) against preparations made to levy fees on digital payments.
According to the CTI, India has joined the list of most digital payment countries with a large portion of the population making payments through the Unified Payments Interface (UPI).
However, the RBI has now started working on the process of levying fees on the payment and soliciting public opinion in this regard. Citizens can submit their idea by completing the form or sending it to the official RBI mailing address by October 3, 2022.
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Brijesh Goyal said that CTI believes that there should be no kind of charge on digital payment as Prime Minister Narendra Modi himself campaigned for the adoption of online payment mode under “Digital India “. He said, “Prime Minister Modi himself launched the ‘BHIM’ UPI app. Many companies like Google Pay, Paytm, PhonePe have also started offering UPI services. Now people no longer need to go to the bank.
Goyal opposed the idea of imposing fees on digital payments and said it would affect transactions and people would again be forced to queue at ATMs and banks.
CTI Secretary General Vishnu Bhargava said merchants have also accepted UPI and digital mode and thousands of transactions are taking place every day. He said many merchants were worried that being charged a fee would mean they would have to go back to the old mode of cash transaction again.
According to the CTI, the working paper issued by the RBI covers all fees related to payment systems such as Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT), Real-Time Gross Settlement System (RTGS) and Unified Payment Interface (UPI) and various payment instruments. The RBI also said feedback received in the form of debit cards, credit cards and prepaid payment instruments (PPIs) will be used to formulate policies.
The CTI said that India has a huge mobile phone user base of around 120 crores. Among them, 75 million people have smartphones. There are 450 million feature phone users who prefer UPI payments.
According to data from the National Payments Corporation of India, 338 banks are working on the UPI system. About 50% of transactions are done via UPI with an amount below Rs 200.
The CTI has been advocating for the complete abolition of taxes on digital transactions for two years. Currently, there are 1% charges on debit cards and 1-2% on credit cards.
The traders’ body demanded that the government pay the fees to the banks through subsidies. He said the government can reduce the cost of printing money if it does not levy fees on digital payments and pays bank charges as subsidies.
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