The Reserve Bank of India (RBI) has proposed issuing a discussion paper on all elements of digital payment charges, such as those incurred while using credit cards, debit cards, prepaid payment instruments, and the Unified Payment Interface (UPI), among other things.

A UPI-based payment product for feature phone users was also recommended by the central bank. The central bank said entities involved in providing digital payment services incur costs that are generally recovered from merchants or customers or are borne by one or more of the participants in its statement on developmental and regulatory policies released after the monetary policy committee meeting on Wednesday.

The RBI's discussion paper invites input on these concerns, including convenience fees, surcharging, and the steps needed to make digital transactions both affordable for customers and economically profitable for providers.

Within a month, the central bank will publish a discussion paper on digital payment charges. "Payment charges vary among payment systems, influencing consumption." Small ticket payments are favoured on low-cost systems, whereas high-ticket payments are preferred on high-cost systems such as credit cards.

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