UPI transaction charges: In a significant move that may impact millions of digital payment users, the central government is considering adding charges on UPI transactions above ₹3,000. Apps like PhonePe, Google Pay, and others may soon not remain completely free for larger payments.

UPI transaction charges:

Since demonetization in November 2016, India has seen a rapid shift towards digital payments. From small kirana stores to luxury showrooms, people now use UPI for everything. With just a phone number, money can be sent instantly from any place. Currently, there are no special taxes or extra charges for UPI transactions, regardless of the amount.

However, according to sources, the government is planning to change this soon. If the new rule is implemented, UPI transactions above ₹3,000 may attract a small fee. While the final decision is still pending, this move could have a big effect on users who regularly send or receive large sums via UPI.

Smaller UPI payments will likely stay free. The Payment Council of India (PCI) has proposed that larger merchants be charged a 0.3% MDR (Merchant Discount Rate). For comparison, credit and debit cards currently have an MDR of 0.9% to 2%. There are no current plans to add MDR to RuPay card payments.

Reports suggest that this change may be enforced in the next two to three months. Once implemented, it could bring extra cost for users and businesses that rely on UPI for high-value payments.

The idea behind the move is to cover the costs of maintaining the UPI system and to ensure fair business models for payment service providers. However, users are likely to have mixed reactions, especially those who prefer digital transactions for their ease and speed.

The government is expected to make an official announcement soon, and till then, digital payment users are advised to stay updated.

Also Read:Verified UPI Handles for Market Payments: Sebi New Rule from Oct 1

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