Charges On Upi Transactions

New Delhi: The government has said no charges would be levied for UPI transactions in response to reports that UPI payments were being levied at per-transaction rates. High-value transactions would, however, attract a cost of up to 0.25% of the transaction value, the RBI said in a statement.

Indian banks have been charging users for making UPI payments. While there is a transaction fee of Rs. 0.50 for payments made through non-Internet Banking channels, the charge was reportedly being levied at Rs. 5.00 for payments made through Internet banking channels. However, the government has said that no charges would be levied for UPI transactions in response to reports that UPI payments were being levied at per-transaction rates.

Charges levied by MobiKwik for UPI transactions

Charges levied by MobiKwik for UPI transactions have been in the news recently, and the government has said that no charges would be levied for UPI transactions in response to reports that UPI payments were being assessed at per-transaction rates. The government has also stated that it is looking at ways to bring down the merchant discount rate that payments banks can charge. This blog will look at these charges and rates and how the government hopes to bring them down.

Recent reports have stated that UPI transactions have been charged at a fee of 1-3.99% per transaction basis. In response to these reports, the government has now indicated that anything below or equal to Rs. 1 is not a chargeable amount for the merchants, and no charges will be levied for payments through the UPI. The RBI, which is the regulating body for UPI, has also stated that per-transaction accounts are not allowed.

 

The government has said no charges would be levied for UPI transactions in response to reports that UPI payments were being levied at per-transaction rates. The Central Government clarified its stance against reports claiming it might levie extra charges on UPI payments. While clarifying that the government is not considering any charges for services on UPI transactions, the Finance Ministry has reiterated its support for the continued uptake of the digital payments system.

The clarification came in the wake of speculations that UPI transactions

The clarification came in the wake of speculations that UPI transactions might require additional charges for maintaining payment infrastructure. Said came amid speculations that UPI transactions might demand an additional charge, with the discussion paper released on Aug.17 by the Reserve Bank of India (RBI) seeking comments related to this issue. After the Reserve Bank of India (RBI) rescued a discussion paper last week on charges in payments systems, the finance ministry on Sunday clarified that the government is not considering charging for Unified Payments Interface (UPI) services. 

The Reserve Bank of India (RBI) sought the opinion of the public and stakeholders of the industry through the discussion paper on amending the policies that regulate charges on various payment mechanisms such as Unified Payments Interface (UPI), IMPS (Instant Payment Service), NEFT (National Electronic Funds Transfer), RTGS (Real-Time Gross Settlement), Debit Card, Credit Card, and Prepaid Instruments. RBI is exploring opportunities for recovering costs from its extensive investments and operating expenses in the payments systems, regulation of interchange fees, and imposition of a per-transaction fee on debit card transactions, as well as the imposition of charges on funds transferred using the Unified Payments Interface (UPI). The Reserve Bank of India (RBI) has invitation public opinion for various changes proposed to the payments system, including the possibility of charging tier-based fees for transactions conducted via the Unified Payments Interface (UPI).

The clarification comes after several media reports

The clarification comes after several media reports claimed that the latest paper by the RBI, entitled Discussion paper on charges in payment systems, had a slew of literature suggesting RBI was considering adding charges on every financial transaction done via UPI. The Discussion Paper covers all aspects related to charges in payment systems like Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT) System, Real-Time Gross Settlement (RTGS) system, and Unified Payments Interface, as well as the different payment instruments like Debit Cards, Credit Cards, and Prepaid Payment Instruments (PPIs). As announced in its December 08, 2021, Development & Regulatory Policy Statement, Central Bank has released a Discussion Paper on the changes in Payment Systems to seek public opinion, the RBI said in a statement.

The finance ministry issued an explanation on August 21 about reports that charges were levied for UPI payments and said the government would not levy additional charges for UPI payments since it is a digital government service intended to better function the economy as well as to facilitate transactions for the public. The Reserve Bank of India, in its conversation Paper, said the government had prescribed a zero-charges facility for transactions through the Unified Payment Interface with effect from January 01, 2020.