Reserve Bank of India Governor Sanjay Malhotra has said that the Unified Payments Interface for digital payments has “borne good fruits”, but cautioned that costs have to be met for any service to be sustainable.

His remarks at the Financial Express BFSI Summit in Mumbai on Friday came amid speculation that instant transactions made via UPI to large merchants may attract a fee in the future.

“Payments and money are the lifeline for any economy,” Malhotra said. “We need to have a universally accessible and efficient system. It is a public infrastructure that needs to be provided.”

He noted that currently, there are no charges for using UPI, and that the Union government is subsidising the costs for various players, banks and stakeholders.

“Obviously, some costs have to be paid,” Malhotra said. “They will have to be defrayed. Right now, it’s the government which is defraying those costs. Going forward, how those costs will be met…I am sure the government will be looking at it.”

Noting that UPI constitutes important infrastructure, he added that the Union government had taken the view that it should be made available for free and was subsidising it. “And I would say it has borne good fruits,” Malhotra said.

However, the RBI governor added that such a system would only be sustainable if someone bears the cost. “As long as it is the government or someone else…Costs of any service should be paid whether collectively or by the user,” he added.

Malhotra said that the RBI was committed to providing a means of payment that was efficient, secure and accessible. “We will ensure that we have a good, robust system working in our country,” he said.

This comes amid widespread speculation that UPI payments might be subjected to a per-transaction fee called the Merchant Discount Rate, The Indian Express reported.

This rate is levied on merchants by banks that process debit and credit card payments. It is usually in the 1% to 3% range.

The Union government had waived the Merchant Discount Rate on RuPay debit cards and BHIM-UPI transactions in December 2019, the Financial Express reported. The reintroduction of the fee and whether users will contribute to the cost of maintaining the UPI infrastructure remains uncertain.

However, the Union government had rejected reports on the Merchant Discount Rate, saying that such talk was “completely false, baseless, and misleading”, The Indian Express reported.

“Such baseless and sensation-creating speculations cause needless uncertainty, fear and suspicion among our citizens,” the Union Finance Ministry said on June 11. “The government remains fully committed to promoting digital payments via UPI.”