'India Could Become Cash Economy Again': Ashneer Grover Slams Possible Charges On UPI Transactions Above ₹2,000
· Free Press Journal
BharatPe co-founder Ashneer Grover has hit out at the possibility of levying charges on Unified Payments Interface (UPI) transactions, calling any such move a backdoor way of collecting tax and warning it could push India back toward a cash-driven economy, according to a News18 report.
Charges would amount to a tax, says Grover
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Speaking to CNN-News18, Grover argued that introducing fees on UPI made little sense for a payment system that has already proven itself, questioning why the government needed to interfere with something that works. His comments came after a government notification barred banks and payment providers from charging users on UPI transactions up to Rs. 2,000 or on RuPay debit card payments - but left the door open for charges on larger transactions, particularly those made by merchants.
NPCI Committee To Decide UPI MDR Charges Soon; Large Merchant Transactions May Face FeesThe Rs. 2,000 threshold doesn't add up, he argues
Grover took issue with where the line was drawn, pointing out that transactions above Rs. 2,000 make up only about 4% of UPI transactions by volume but account for roughly 66 percent of their total value. He argued this meant the government had picked a convenient cutoff that lets it tax the bulk of UPI's transaction value while claiming to protect the vast majority of individual transactions.
Warns Of a return to cash
Grover cautioned that if merchants are eventually permitted to charge a Merchant Discount Rate on bigger transactions, businesses could simply refuse UPI payments over the threshold and push customers toward cash instead. That shift, he said, would mean more ATMs, higher cash-handling costs for banks, and ultimately more expense than any revenue the charges might generate - potentially reversing India's digital payments gains. He also predicted consumers could simply split large payments into smaller UPI transactions to dodge any fee altogether.
Points to NPCI and bank profits
Questioning the need for a revenue model at all, Grover cited the Reserve Bank of India's Rs. 2.87 lakh crore surplus transfer to the government, total listed bank profits of Rs. 4.11 lakh crore, and NPCI's pre-tax surplus of Rs. 1,888 crore, asking whose losses the charges were meant to offset.