UPI Payment Fee: You may have to pay a fee for using UPI Payment App?
UPI transactions remain largely free for most users, especially for direct bank-to-bank transfers, certain types of transactions now incur fees.
Types of Transactions That May Incur Fees
Credit Card Bill Payments via UPI Apps:
Platforms like Google Pay, PhonePe, and Paytm charge between 0.5% to 1% for bill payments made using credit cards linked to UPI apps.
This fee applies to transactions such as electricity bills, cooking gas bills, etc.
Prepaid Wallet Transactions:
A 1.1% interchange fee is applied to merchant transactions exceeding ₹2,000 when made through prepaid payment instruments (PPIs) like digital wallets.
This fee is typically borne by the merchant, not the customer.
International Transactions:
UPI transactions made outside India may incur conversion and transaction fees, depending on the platform and country.
Business UPI Accounts:
Business UPI accounts may attract merchant discount rate (MDR) charges or wallet interchange fees.
How to Avoid UPI Charges
Use Bank-to-Bank UPI Transfers: These remain free and avoid any additional fees associated with credit cards or prepaid wallets.
Avoid High-Value PPI Transactions: If possible, split large transactions to avoid exceeding the ₹2,000 threshold for PPIs.
UPI remains a cost-effective option for most users, understanding the fee structure can help avoid unnecessary charges. For specific transactions involving credit cards or prepaid wallets, fees may apply. However, direct bank-to-bank transfers continue to be free.
Currently, UPI (Unified Payments Interface) payments are typically free for users in India, especially for peer-to-peer (P2P) transactions or transactions between individuals and businesses. However, the situation may change, as there have been discussions and proposals to introduce charges on UPI transactions.
As of now:
Peer-to-peer transactions: Sending or receiving money between individuals using UPI is generally free.
Merchant payments: UPI payments to merchants are also usually free, though certain banks or payment apps might charge a fee for specific services or premium offerings.
However, some experts and institutions have discussed the possibility of implementing fees in the future, especially for high-value or high-frequency transactions, to cover operational costs and encourage more innovation.
As of now, UPI transactions are mostly free, but there could be potential for charges in the future depending on the decisions by regulators, banks, or payment service providers. Always check with your bank or the UPI payment app for the most up-to-date information.
