The Reserve Bank of India sought public feedback on fees and charges in payment systems on Wednesday, with the goal of making such transactions both affordable and economically rewarding for the entities involved. Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT), Real Time Gross Settlement (RTGS), and Unified Payments Interface are among the payment services (UPI). Other preferred payments include debit cards, credit cards, and Prepaid Payment Instruments (PPIs).
What RBI Said
The central bank stated in a discussion paper on ‘Charges in Payment Systems’ that the focus of its initiatives in payment systems has been to ease frictions that may arise from systemic, procedural, or revenue-related issues.
The Reserve Bank of India (RBI) has asked for public feedback on 40 specific questions about payment system charges and levies by October 3.
Despite the fact that there are numerous intermediaries in the payments transaction chain, consumer complaints are generally about high and opaque fees.
The RBI emphasized that online payment charges should be reasonable and competitive for users, while also providing an optimal revenue stream for intermediaries.
“To make sure this balance, it was thought useful to conduct a comprehensive review of the various charges made in payment systems by emphasising various dimensions and soliciting stakeholder feedback,” it said.
You Should Know About Online Payment Transfer charges System
Charges in a payment service are the costs imposed on users (originators or beneficiaries) by Payment Service Providers (PSPs) for facilitating a digital transaction. Depending on the type of payment system, the charges are recovered from the originators or the beneficiaries.
Charges are generally recovered from the originator of the payment instruction in a funds transfer payment system. These are typically levied in addition to the amount designated for remittance.
Charges are usually recovered from the final recipient of money in the case of a merchant payment system (merchant). This is accomplished by deducting the amount from the merchant’s receivables or applying a discount to the merchant’s receivables.
Entities that provide digital payment services incur costs, which are typically recovered from the merchant or client or borne by one or more of the people involved.
While there are benefits and drawbacks to customers having these charges, the RBI previously stated that they should be reasonable and not act as a deterrent to the adoption of digital payments.