Businesses should bear modest UPI transaction costs, govt cannot subsidise everything: NITI Aayog VC Lahiri

New Delhi [India], September 16 (ANI): NITI Aayog Vice Chairman Ashok Kumar Lahiri on Wednesday said businesses should bear modest UPI transaction costs, arguing that the government cannot subsidise every transaction, while clarifying that this was his personal view and not NITI Aayog’s official position.
Speaking to ANI on UPI transaction charges, Lahiri said operating the digital payments system involves costs and raised the question of who should ultimately bear them.
“There is a cost involved in UPI. Who will bear that cost?” Lahiri said.
Drawing on the “user pays” principle, he said those using a service should contribute towards its cost rather than expecting the government to support it indefinitely.
He, however, clearly distanced the remark from NITI Aayog’s institutional position.
“As far as UPI is concerned, this is not NITI Aayog’s official position; this is my personal position. My view is that for any business or any transaction, the user should pay,” Lahiri said.
He further clarified that businesses could be charged, but the levy should remain modest so that it does not restrict the continued expansion of digital payments.
“We should not think that the government will provide grants or subsidies for everything. If that happens, how will the business function?” he said.
“Charge businesses, but charge only as much as is necessary so that the system can continue to grow,” Lahiri added.

The government has said that the new UPI framework introduced has no impact on any person-to-person transactions.

It said that UPI will continue to remain completely free for all person-to-person transactions, irrespective of the amount transferred. Approximately 96% of all P2M transactions will remain unaffected. MDR will apply only to specified merchant transactions above Rs 2,000.
The government clarified that MDR is neither a tax nor a charge collected and is distributed among payment ecosystem participants, including banks and payment application providers, to support the operation and continued expansion of the UPI ecosystem. (ANI)