UPI Charges Would Undermine Digital India Initiative: Padmaraj R. Poojary
Mangaluru: The reported move by the Union Government to impose charges on UPI transactions is contrary to the objectives of Digital India and could hamper the growth of the country’s digital economy, said Padmaraj R. Poojary, president of the Dakshina Kannada District Congress Committee.
He said that after initially encouraging people to adopt digital transactions by promoting a payment system that was simple and free, the move to impose charges on digital payments could discourage the public from continuing to use UPI. He termed this a contradiction in the government’s approach to digital payments.
He said the argument that UPI charges would not be collected directly from consumers but imposed on merchants in the form of Merchant Discount Rate (MDR) does not resolve the issue. He added that additional costs incurred by merchants could eventually be passed on to consumers through higher prices of groceries, fuel and other essential commodities.
Such charges and tax-related regulations could also create confusion and uncertainty among small traders, potentially prompting them to return to cash transactions. Poojary said if consumers and small businesses shift from digital payments back to cash, there could be implications for the transparency of financial transactions.
He said that imposing an additional financial burden on a payment system such as UPI, which is simple, fast and widely used, would not be an appropriate step at a time when the country is moving towards a digital economy.
Poojary urged the Union Government to reconsider any proposal to impose additional charges on UPI transactions, keeping in mind the interests of consumers and small businesses.
He said that instead of introducing measures that could place an additional burden on digital transactions, the government should adopt policies that strengthen the Digital India initiative and encourage wider adoption of digital payments.