Will Upi Transactions Be Charged

Since most of us use UPI payments at merchants and online, be aware of how much your bank charges for UPI Transactions 

UPI (Unified Payments Interface) is a virtual platform that allows users to send and receive money in real-time using a VPA (Virtual Payment Address) and a UPI PIN. It is the most popular and user-friendly payment option in Digital India, owing to its low cost. However, there has been a lot of press recently about anticipated changes to UPI rates. 

UPI was created by the National Payments Corporation of India (NPCI) and is powered by the Reserve Bank of India. Its main goal is to provide an instant payment system using the IMPS structure. It allows users to send and receive money in real-time.

For UPI transactions, no bank account information or other information is necessary. Payments can be made with only a UPI PIN and the recipient's VPA or cellphone number. The UPI PIN, which is a 4-6 digit passcode, is required for transactions. When you register with a UPI app, you must create a UPI PIN for the app to work.

What are the UPI Charges for Transactions?

UPI, India's most popular payment system, is now interoperable with the majority of Indian banks and electronic wallets, including Google Pay, PhonePe, BHIM UPI, Paytm, and others. The big question is whether or not UPI charges a transaction fee for payments.

Although we all know that UPI is free, news has been spreading that some banks may start charging for UPI transactions. Payment methods like NEFT, IMPS, and others are also imposing fees based on transaction volumes. NPCI has also suspended payment service provider (PSP) fees for all domestic UPI peer-to-merchant (P2M) transactions till February 2020.

Expected Cost of UPI Transactions

In February 2020, Kotak Mahindra Bank became the first bank to charge for UPI transactions, followed by other banks. Users may soon be charged for P2P transactions by banks such as HDFC, Axis, and SBI, which provide UPI services.

What is the UPI Transaction Charge & Free-Transactions Count at Kotak Mahindra Bank?

After the first 20 free UPI transactions, Kotak Mahindra bank began charging a transaction fee on each transaction. Each month, you are entitled to 20 free UPI transactions, after which you will be charged based on your payment volume. You will be charged Rs. 2.50 per transaction for transactions under Rs. 1000, and Rs. 5.50 for transactions beyond Rs. 1000. These changes came into effect on March 1, 2020 in Kotak Mahindra Bank UPI while doing transaction,

 

AXIS Bank UPI Transaction Charges & Free Transaction Count

Once a user exceeds the monthly limit of 20 free transactions, Axis Bank has imposed a transaction fee on UPI transactions of Rs. 1000 or more. According to reports, Axis Bank sent out emails to its customers informing them of the new shift, noting that there will be 20 free transactions per month, after which users will be charged based on the volume of their transactions.

 

UPI Transaction Charges & the Free-transactions’ Count at HDFC Bank

Similarly, HDFC Bank has sent out a notification to its clients reminding them of the UPI transaction fees, which will be calculated based on transaction volumes. It will also have the same monthly limit of 20 free transactions per user for P2P transfers. Even if the transaction is for Rs. 1001 or more, you will be charged for additional transactions. These provisions will take effect on May 3, 2020.

The charges for P2P fund transfers via HDFC Bank UPI are as follows:

 

Bank Of Baroda UPI Transaction Charges & Free Transaction Count

Since there isn’t any update on the UPI transaction charges from the BOB, we will update this information on any official announcement from the BOB.

SBI Bank UPI Transaction Charges & Free Transaction Count

SBI Bank has also not provided any updates on these UPI transaction charges. Once there is an official announcement from SBI, this information will be updated. 

ICICI Bank UPI Transaction Charges & Free Transaction Count

There is no update on charges on UPI Transaction from ICICI Bank. We will update once there is an official announcement from ICICI bank.

Even though UPI transactions will no longer be free, they are still quite inexpensive when compared to other payment solutions. Also, keep in mind that transaction fees only apply after you've used up your free transaction limit for the month. If you exceed this limit, you will be charged Rs. 2.50 for transactions under or equal to Rs. 1000, and Rs. 5 for transactions beyond Rs. 1000, plus 18% Goods and Services Tax (GST).

FAQs: 

1. What is the daily transaction limit on UPI?

UPI allows a daily transaction limit of Rs.1 lakh

2. Can you transfer funds from your credit card using UPI?

No, you can transfer funds only from your savings bank account using UPI. 

3. What are the number of free UPI transactions allowed by Kotak Mahindra Bank?

Kotak Mahindra Bank allows a total of 20 free UPI transactions every month, after which you will be charged a nominal transaction fee. 

4. Is UPI faster than NEFT?

Yes, UPI transactions are instant while NEFT transactions may take up to 2 hours to be effected. IMPS transactions are instant though. 

5. Are the charges on transactions charged by UPI or the bank?

It is the bank that is charging for the UPI transactions over and beyond the free limit every month.