In a bid to convert the masses to try cashless payments, the government launched UPI payments in the country last year. The aim was to form a simplified payment system that allows money transfer between any two bank accounts with a phone. Many banks followed the government’s regulation and launched their respective UPI apps that facilitated users to make cashless payments while paying bills, and even buying groceries from merchants. The big advantage was that all these transactions were free, and many users lauded the government’s new effort. However, in a new development, it appears that UPI transactions will be chargeable from July 10 onwards.
In an email sent by HDFC to some customers, it informs its customers that "all UPI outward transactions will be chargeable from 10th July 2017". For transaction amount of Re. 1 to Rs. 25,000, the fee will be Rs. 3 plus taxes, and for transaction amount of Rs. 25,001 to Rs. 100,000, the fee will be Rs. 5 plus taxes. This email was shared on Reddit by a user named Gatiman, and the thread that follows after has mostly negative reactions to it.
A few other HDFC customers, including some of the Gadgets 360 team, have also received the same email. If small transactions with merchants are also charged, then users would obviously prefer using cash rather than paying using an app. As of now, only HDFC has sent out such an alert to its customers, and other banks haven’t released any such prerogative. It isn’t clear whether this charge is only levied by HDFC or other banks will follow suit soon. We've reached out to both NPCI and HDFC for clarification about the new UPI charges, and received this statement from Dilip Asbe, Chief Operating Officer, NPCI.
"We have provided Unified Payments Interface (UPI) platform to banks and other institutions for their customers. So far, no bank is charging for UPI transactions but at the same time it is at their discretion to levy a reasonable fee towards Person to Person (P2P) transactions for UPI and IMPS. However, Person to Merchant (P2M) transactions in UPI will remain free to customers as per NPCI guidelines."
Ever since launch, services like Ola, Samsung Pay, and many more have integrated UPI to give their users another option to pay without cash. WhatsApp was also reported to in April to ready its UPI-based payment service in India, and levying a tax on transactions will only hinder all the progress the government has made so far.