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RBI invites feedback on charges in payment systems

The RBI has released a discussion paper on “Charges in Payment Systems” for public feedback, which may be provided in respect of questions raised therein, including other relevant suggestions, through email on or before October 3, 2022.

While there are many intermediaries in the payments transaction chain, consumer complaints are generally about high and non-transparent charges. Charges for payment services should be reasonable and competitively determined for users while also providing optimal revenue stream for the intermediaries. To ensure this balance, it was considered useful to carry out a comprehensive review of the various charges levied in the payment systems by highlighting different dimensions and seeking stakeholder feedback, the RBI stated in a release.

RBI has released sets of questions for feedback:

Qs for RTGS, NEFT transactions

For RTGS transactions, should RBI prescribe the charges that can be levied on customers by members, or should they be market driven?  Should RBI prescribe charges for NEFT transactions to be levied by banks on their customers, or should they be market driven? Should RBI fix a ceiling on charges that can be imposed in IMPS?

Qs for debit card transactions

Should debit card transactions be charged as normal funds transfer transactions? Should RBI deregulate MDR for debit card transactions and let stakeholders decide on optimum level of MDR and interchange? Should MDR for debit cards be a percentage of the transaction value or should it be a fixed amount irrespective of the transaction value? Should RuPay cards be treated differently from other debit cards affiliated to international card networks in terms of MDR?

Qs for MDR charges

Are credit card MDR charges reasonable? Should RBI regulate MDR for credit cards? Instead of MDR, should RBI regulate interchange for credit card transactions? Should RBI regulate MDR for PPI transactions? Should the charges structure for merchant payments done using PPIs be akin to that of debit cards? Should charges for cash withdrawal using PPIs be regulated?

Qs for UPI transactions

In the context of zero charges, is subsidising costs a more effective alternative? If UPI transactions are charged, should MDR for them be a percentage of transaction value or should a fixed amount irrespective of the transaction value be levied?

Qs for intermediaries

Should intermediaries be transparent in the way charges are levied by them? Should the various charges levied by intermediaries be unbundled and charged separately? Should these charges be subjected to regulation?

Qs for surcharges

Are surcharges justified? Are they desirable? Should merchants be allowed to levy surcharge on customers? Should surcharging be regulated? By whom?

Qs for convenience fee

Should convenience fee be regulated? By whom?

ii. Should such charges be the same irrespective of the number of seats/tickets booked?

iii. Should such charges be based on value of a transaction?

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