UPI Payment: No more free lunches

After the National Payments Corporation of India’s (NPCI) notification regarding the transaction fee, everyone was in fear that, starting April 1, they would have to pay transaction charges when making any UPI payment. But on Wednesday, NPCI clarified this confusion and said, “There will be no fee on any bank-to-bank transfer via UPI. It’s a relief for the public.

Now we will look into the amendments on digital payment.

If any merchant payment made above Rs 2000 between two different wallets, then that payment becomes chargeable.

– For transactions above Rs 2,000, there will be a 1.1% interoperable charge on each transaction.

-Only merchant transactions involving prepaid payment instruments (PPIs) are subject to exchange fees.

-In other words, if any merchant payment over and above Rs 2000 is done from Paytm wallet to PhonePe wallet, then the merchant has to pay a 1.1% interchange fee.

-This amendment was introduced to cover the interchange fee between two different wallets.

 

With the advent of COVID-19, digital modes of payment took the front seat and began playing a major role in the transfer of money. It enabled hassle-free transactions along with speed and security.

Platforms like Paytm, PhonePay, and GooglePay are the major dominant players, and Rs 9,192 crore worth of transactions have been made in 2022-2023, which is quite a big amount.

The most widely used option is UPI. Users can make any UPI transaction once they link their bank account with the UPI app. It is simple, fast, and reliable, and it also contributes to 99.9% of all UPI transactions.

India has been witnessing the rapid growth of digital payment modes from the past few years, and according to sources, within the next five years, the Indian digital payment market will increase by a factor of three, or around $10 trillion.

Indian Digital payment has come along a long way from the inception which has made quite secure and reliable.