{"id":4236,"date":"2022-08-31T22:56:33","date_gmt":"2022-08-31T17:26:33","guid":{"rendered":"https:\/\/innoviti.com\/?p=4236"},"modified":"2024-04-17T12:07:22","modified_gmt":"2024-04-17T06:37:22","slug":"can-we-expect-transaction-charges-on-upi-an-explainer","status":"publish","type":"post","link":"https:\/\/innoviti.com\/blog\/can-we-expect-transaction-charges-on-upi-an-explainer\/","title":{"rendered":"Can We Expect Transaction Charges on UPI? An Explainer"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"4236\" class=\"elementor elementor-4236\">\n\t\t\t\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-06e7e36 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"06e7e36\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-2cedfff\" data-id=\"2cedfff\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t\t\t<div class=\"elementor-element elementor-element-fd5d373 elementor-widget elementor-widget-text-editor\" data-id=\"fd5d373\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.14.0 - 26-06-2023 *\/\n.elementor-widget-text-editor.elementor-drop-cap-view-stacked .elementor-drop-cap{background-color:#69727d;color:#fff}.elementor-widget-text-editor.elementor-drop-cap-view-framed .elementor-drop-cap{color:#69727d;border:3px solid;background-color:transparent}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap{margin-top:8px}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap-letter{width:1em;height:1em}.elementor-widget-text-editor .elementor-drop-cap{float:left;text-align:center;line-height:1;font-size:50px}.elementor-widget-text-editor .elementor-drop-cap-letter{display:inline-block}<\/style>\t\t\t\t<h2 class=\"my-2 h5\">Concerns Over UPI Transaction Fee<\/h2><p>Recently, the Reserve Bank of India (RBI) came out with a discussion paper and sought the public\u2019s views on potential charges levied in UPI payment systems. There was a flurry of opinions, thoughts, and anxieties about this proposal. The Finance Ministry had to clarify that the Government is not considering any UPI transaction charges.<\/p><p>UPI is one of India&#8217;s most used and safest payment systems. Developed by National Payments Corporation of India (NPCI), UPI allows users to send and receive funds using a mobile app.<\/p><h2 class=\"my-2 h5\">The Govt&#8217;s contribution to promote UPI payments<\/h2><p>The RBI invited stakeholders to share their opinions if the fee paid by merchants, also referred to as Merchant Discount Rate or MDR, and if acquirer banks should be brought under the ambit of UPI transactions. This paper sought stakeholders\u2019 feedback on the fee structure for an array of digital payment solutions.<\/p><p>They shared a questionnaire comprising 40 questions and asked stakeholders to submit it by 3rd October 2022. As per RBI officials, the feedback thus received would be used as a policy guideline and to create intervention strategies.<\/p><p>RBI also clarified that no specific view or opinion had been taken on the issues mentioned in the discussion paper. However, it covered broad aspects like charges in payment systems like Real Time Gross Settlement or RTGS, National Electronic Funds Transfer or NEFT, Immediate Payment Service or IMPS, and Unified Payments Interface or UPI, besides other payment instruments like credit cards, debit cards, and PPIs or prepaid payment instruments.<\/p><h2 class=\"my-2 h5\">MDR in UPI as of today<\/h2><p>The MDR or the Merchant Discount Rate is a fee paid by a merchant when accepting <b>digital transactions<\/b>. A merchant must pay MDR on every transaction when they accept payments through debit cards, credit cards, digital wallets, and net banking. Currently, there is no MDR on UPI because of its 45 days interest-free period and unsecured nature. Moreover, it also helps in maintaining liquidity.<\/p><p>Although there has been a long-standing demand for MDR on UPI, the Government has mandated a zero-charge framework for UPI transactions. Thus, there are nil charges on UPI transactions.<\/p><p>As per official NPCI data, there were 628.84 crore UPI transactions in July alone, valued at Rs 10.63 lakh crore. The Reserve Bank of India recently plans to extend UPI to include credit cards and NPCI\u2019s RuPay cards. UPI stems from the idea to provide fast, secure and hassle-free payments, and thus in this evolving payment space Innoviti too has a unique solution called upi deeplink.<\/p><p>\u00a0<\/p><h2 class=\"my-2 h5\">Conclusion<\/h2><p>As per the Government, UPI services are a \u2018digital public good.\u2019 The Ministry of Finance had to clarify that the concerns related to cost recovery among service providers shall be met through other means. Currently, the Government is not considering levying any charges for UPI services. Many steps have been taken as a Government contribution to promote UPI payments. Innoviti provides a safe and secure payment platform for quick and hassle-free transactions.<\/p><div class=\"row\"><h4 class=\"my-2 h5\">FAQs<\/h4><div id=\"accordionFlushExample\" class=\"accordion accordion-flush\"><div class=\"accordion-item border_clss\"><h2 id=\"flush-headingOne\" class=\"accordion-header\"><button class=\"accordion-button collapsed\" type=\"button\" data-bs-toggle=\"collapse\" data-bs-target=\"#flush-collapseOne\" aria-expanded=\"false\" aria-controls=\"flush-collapseOne\"> Why is UPI free? <\/button><\/h2><div id=\"flush-collapseOne\" class=\"accordion-collapse collapse\" aria-labelledby=\"flush-headingOne\" data-bs-parent=\"#accordionFlushExample\"><div class=\"accordion-body\"><p>The Ministry of Finance considers UPI payment as a digital public good, and as such, it has not been brought under the ambit of MDR.<\/p><\/div><\/div><\/div><div class=\"accordion-item border_clss\"><h2 id=\"flush-headingTwo\" class=\"accordion-header\"><button class=\"accordion-button collapsed\" type=\"button\" data-bs-toggle=\"collapse\" data-bs-target=\"#flush-collapseTwo\" aria-expanded=\"false\" aria-controls=\"flush-collapseTwo\"> How many UPI transactions are free? <\/button><\/h2><div id=\"flush-collapseTwo\" class=\"accordion-collapse collapse\" aria-labelledby=\"flush-headingTwo\" data-bs-parent=\"#accordionFlushExample\"><div class=\"accordion-body\"><p>UPI transactions are free but are usually limited to 20 transactions. The limit of transactions per UPI transaction is capped at INT 1 Lakh. This upper limit may vary from one bank to another. Thus, this limit may range between Rs 10,000 to Rs 1 Lakh. The transaction limit per day is Rs 1 Lakh.<\/p><\/div><\/div><\/div><div class=\"accordion-item border_clss\"><h2 id=\"flush-headingThr\" class=\"accordion-header\"><button class=\"accordion-button collapsed\" type=\"button\" data-bs-toggle=\"collapse\" data-bs-target=\"#flush-collapseThr\" aria-expanded=\"false\" aria-controls=\"flush-collapseTwo\"> Which is better-UPI or IMPS? <\/button><\/h2><div id=\"flush-collapseThr\" class=\"accordion-collapse collapse\" aria-labelledby=\"flush-headingTwo\" data-bs-parent=\"#accordionFlushExample\"><div class=\"accordion-body\"><p>UPI is the best payment system, as these transactions can be made free of charge. Moreover, the UPI app is backed by the Reserve Bank of India. It is also safer than IMPS and other payment transaction platforms.<\/p><p>\u00a0<\/p><\/div><\/div><\/div><\/div><\/div>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Concerns Over UPI Transaction Fee Recently, the Reserve Bank of India (RBI) came out with a discussion paper and sought the public\u2019s views on potential charges levied in UPI payment systems. There was a flurry of opinions, thoughts, and anxieties about this proposal. The Finance Ministry had to clarify that the Government is not considering [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":18312,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[7],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v18.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Can We Expect Transaction Charges on UPI? An Explainer<\/title>\n<meta name=\"description\" content=\"Are you aware of the discussion paper released by the RBI about UPI transaction charges? Worry not! 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