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Correspondent

21 August 2024 at 10:20:16 am

Fee Signal

The government’s decision to create a legal framework for levying charges on UPI transactions has understandably triggered concern, even though it insists that ordinary users and small merchants will continue to enjoy free payments. The proposed amendment does not impose a fee on UPI today. But it removes the statutory barrier to one being imposed in the future, making the government’s reassurance less than the final word. The government argues that this is a measure for UPI’s long-term...

Fee Signal

The government’s decision to create a legal framework for levying charges on UPI transactions has understandably triggered concern, even though it insists that ordinary users and small merchants will continue to enjoy free payments. The proposed amendment does not impose a fee on UPI today. But it removes the statutory barrier to one being imposed in the future, making the government’s reassurance less than the final word. The government argues that this is a measure for UPI’s long-term sustainability. The world’s largest real-time payments system, which processed 2,366 crore transactions worth Rs. 29.9 lakh crore in July alone, cannot indefinitely depend on subsidies as transaction volumes, cybersecurity requirements and infrastructure costs rise. A nominal Merchant Discount Rate on larger merchant transactions, it says, would help create a more sustainable ecosystem without burdening ordinary users. That argument has merit. But so does the concern that a payment system which became a national habit precisely because it was cheap and frictionless should not slowly acquire a price tag. Once the legal machinery for charging exists, there is no guarantee that the boundary between large merchants and small ones, or between merchants and consumers, will remain permanently fixed. The Finance Minister has clarified that any Merchant Discount Rate will apply only to a limited set of merchant transactions above a threshold and will be nominal, well below card-payment rates. The details will eventually be decided by the UPI and Services Steering Committee headed by the National Payments Corporation of India. In other words, there is no charge on the table for the ordinary UPI user today. But there is now a legal mechanism for charges to be introduced tomorrow. That is precisely why any alarm, though exaggerated, cannot simply be dismissed. The government, through its clarification, has reassured that UPI’s free-to-consumer model remains intact. The important issue is whether its financing model can evolve without undermining the habits that made it revolutionary. UPI succeeded partly because it made digital payments cheaper and simpler than alternatives. There is also a larger principle at stake. UPI is not merely another commercial payments platform. It is the product of public investment, regulatory architecture and private innovation. The state should therefore be wary of treating its sustainability as an ordinary market problem. The sensible answer lies between free-for-all subsidies and indiscriminate fees: transparent thresholds, genuinely low MDRs, strong protection for small merchants and an absolute firewall around ordinary consumers. The government should publish the economic case for any future charge, including its effect on merchants and consumers. UPI was built on trust as much as technology. The government is right to protect its remarkable achievement. It should remember that keeping UPI free is not merely a political promise. It is part of the product.

US Vice President JD Vance, his family arrive in Delhi

  • PTI
  • Apr 21, 2025
  • 2 min read


NEW DELHI: US Vice President J D Vance arrived here on Monday on a four-day visit to India against the backdrop of ongoing negotiations for a bilateral trade agreement between the two strategic partners to address a variety of issues, including tariff and market access.


Vance is accompanied by his Indian-origin wife Usha Chilukuri and their three children Ewan, Vivek, Mirabel and a delegation of senior US government officials.


The US Vice President and the Second Lady were received at the Palam air base by Union Minister Ashwini Vaishnaw.


The American leader was also accorded a ceremonial welcome on his arrival.

In the evening, Prime Minister Narendra Modi will host a dinner for the Vances after holding wide-ranging talks with the US Vice President.


External Affairs Minister S Jaishankar, NSA Ajit Doval, Foreign Secretary Vikram Misri and Indian ambassador to US Vinay Mohan Kwatra are expected to be part of the Indian team to be led by PM Modi at the talks.


The focus of the meeting is likely to be on early finalisation of the proposed bilateral trade pact as well as ways to boost overall trajectory of ties between the two countries.


Besides Delhi, Vance and his family will travel to Jaipur and Agra.

Vance's first visit to India comes weeks after US President Donald Trump imposed and then paused a sweeping tariff regime against around 60 countries, including India.


New Delhi and Washington are now holding negotiations to seal a bilateral trade agreement that is expected to address a variety of issues, including tariff and market access.


Vance and his family are scheduled to leave for Jaipur on Monday night.

In Delhi, the US Vice President and his family are staying at the ITC Maurya Sheraton hotel.


On April 22, the Vances will visit a number of historical sites in Jaipur, including the Amer Fort, also known as Amber Fort. The fort is a UNESCO world heritage site.


In the afternoon, the US Vice President is scheduled to address a gathering at the Rajasthan International Centre in Jaipur.


Vance is expected to delved into broader aspects of India-US relations under the Donald Trump administration during his speech that is expected to be attended by diplomats, foreign policy experts, Indian government officials and academia.


The US Vice President and his family will travel to Agra on the morning of April 23, people familiar with the matter said.


In Agra, they will visit the Taj Mahal and Shilpgram which is an open air emporium showcasing various Indian artefacts, they said.


After concluding their visit to Agra, the Vances will return to Jaipur on the second half of April 23.


The US Vice President and his family will depart for the US from Jaipur on April 24, according to the people cited above.

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