RBI clarified that UPI payments will remain free for users.
Paytm (One97 Communications) shares rose 2% on Wednesday after the Reserve Bank of India (RBI) clarified that there are no current plans or proposals to impose any fees or charges on Unified Payments Interface (UPI) transactions.
In a post-policy press conference, RBI Governor Sanjay Malhotra said that UPI payments will continue to be free for users.
There were some concerns about the sustainability of UPI’s zero-cost model, as earlier statements had indicated that UPI may not remain free indefinitely. However, the governor’s clarification led to a relief rally in Paytm shares.
While personal UPI payments are free, merchants making UPI payments through prepaid payment instruments (wallets) on transactions above ₹2,000 may incur interchange fees ranging from 0.5% to 1.1%, which the merchants bear and not the customers. However, bank-to-bank UPI transactions remain free of any charges for all users.
In August, the RBI removed its previous restrictions on merchant onboarding and granted Paytm’s fully owned subsidiary, Paytm Payments Services (PPSL), an in-principle approval to operate as an online payment aggregator.
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Paytm shares have risen 12% year-to-date (YTD)
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