UPI Payment Fee: Government To Charge For UPI Transactions Above Rs 2,000
New Delhi: Unified Payments Interface or UPI platforms are all set to take charge for transactions. Ending years of free service, the government may start charging for UPI transactions above Rs 2,000.
As per the report, payments above Rs 2,000 would cover about 5 percent of all UPI transactions but 65 percent of the total transaction value. The proposal under consideration is an MDR of 0.3 per cent to 0.5 per cent on UPI transactions above Rs 2,000 for merchants with annual turnover of more than Rs 1.5 crore.
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Notably, the majority of UPI transactions will likely not be impacted by such a fee as most people are using UPI for personal transactions, such as buying groceries or paying for cab rides.
The change would allow banks and payment service providers to charge merchant discount rate (MDR) on notified electronic payment modes. The amendment is part of changes to the Payment and Settlement Systems Act and the Taxation and Other Laws (Amendment) Bill.
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So far, the UPI platforms and service providers do not earn from processing UPI transactions. Hence, they argue that their ability to invest in technology, strengthen payment infrastructure and expand services is limited. They say that charging the service charge would help them build a sustainable business.
