Banks May Start Charging For UPI Transactions
UPI was introduced in India three years ago and in a bid to promote its use, these transactions remained free of cost. Positively, UPI registered a growth of 349 percent in terms of volume to close to 800 million and 452 percent in value to over Rs 1.3 lakh crore during the financial year 2018-19, according to NPCI’s (National Payments Corporation of India) data.
However, according to a BloombergQuint report citing sources, larger banks are in talks to consider charging their customers for services on the platform. The mechanism for these charges will be similar to those made on cash withdrawals at ATMs where the only transactions beyond a certain limit are charged with a fee.
First few transactions will remain free. Further, these will only be imposed on peer-to-peer transactions and not on payments made to merchants for their services. The report further said that the charges are only being considered and no final decision has been taken yet. The sources said that the fee was considered not to earn an income but to cover the cost of processing these transactions.
On 1 April, Kotak Mahindra became the first lender to introduce charges on UPI transactions. It is imposing a fee on over 30 peer-to-peer transactions at the rate of Rs 2.5 and Rs 5 on those worth upto Rs 1,000 and above, respectively.