Do you think that the Unified Payment Interface based payments needs to be charged in the country? Analyse (200 Words)
Refer - Business Line
Enrich the answer from other sources, if the question demands.
IAS Parliament 2 years
KEY POINTS
· A sustainable and efficient payment system can be built only if the usage charges are fixed at a level that balances the interests of both users and operators.
· The discussion on UPI-based payments is particularly important since a zero-charge framework has been mandated by the Centre for these transactions since 2020.
· This was done with a view to speed up the digitisation of money transfers and payments and to reduce cash usage; neither users nor merchants are currently charged for UPI-based transfers or purchases.
· The merchant discount rate (MDR) charged on UPI transactions should be a factor of transaction value and can be market determined. But the RBI should set an upper limit on the MDR to protect users.
· The MDR for these instruments needs to be higher to compensate the issuer for the interest-free credit given to the user and the credit risk borne.
· The central bank needs to ensure that MDR on these instruments move lower by laying down an upper limit, which could be linked to the policy rate.
· The RBI could consider charging the banks for using the RTGS and NEFT systems as the central bank incurs capital as well as recurring expenses to facilitate these services.
LITTLE FINGERS 2 years
Kindly review
IAS Parliament 2 years
Try to bring coherence in the answer, add more content to the answer and include data to support your answer. Keep Writing.
Varon 2 years
Kindly review
IAS Parliament 2 years
Try to include about merchant discount rate. Keep Writing.
PANDI SANTHOSH RAJA S 2 years
Kindly review
IAS Parliament 2 years
Good attempt. Keep Writing.
Aravind R 2 years
Kindly provide feedback mam/sir
IAS Parliament 2 years
Good attempt. Try to include data to support your arguments. Keep Writing.
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