Banks May Slash UPI Fees for Merchants – ZMR Blog
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Banks May Slash UPI Fees for Merchants

Banks May Slash UPI Fees for Merchants

In a bit to drive the UPI (Unified Payments Interface), the government will encourage for a decrease in the charges of account-to-account platform for vendors in the low-value sector.Moreover, the government has expanded benefits below the referral offer for the BHIM app to most of the UPI applications of banks as well. Apart from this, banks have been permitted to use the BHIM app for their personal UPI apps to elevate the usage.

“The government has liberalized the BHIM referral program to comprise each and every UPI referrals. We have also suggested that incentives to users for referrals be increased to Rs 25 from Rs 10,” claimed MD & CEO of NPCI,A P Hota, to the media in an interview. The referral program, declared in the Union Budget for 2017–2018, offers incentives to anybody who can convince another person to activate a UPI ID.

P2P (peer-to-peer) shifts below UPI are presently free of cost but companies are taxed for getting payments through this mobile-based network. HDFC Bank and SBI had planned to introduce fees on P2P UPI payments as well, starting from June. HDFC Bank had declared a fee of Rs 3 and Rs 5 on payments of up to Rs 25,000 and more, respectively. On the other hand, the NPCI requested banks to desist from applying fees until decision on the industry level is made.

UPI Fees

In vendor payments, the shopkeeper gives 0.25% on transactions of up to Rs 1,000 and 0.65% on payments above Rs 1,000. As UPI vendor fees are more than debit cards in some sectors, these are expected to be taken down. Also, the decision of SBI to remove account-to-account shift (Immediate Payment Service, or IMPS) fees on payments of up to Rs 1,000 is seen as a symbol that less-value P2P payments may be carried out free of cost.

Below UPI, users request or make transactions utilizing the UPI ID of counter-party. This UPI ID can be an email-like ID. This ID restores the requirement for knowing details of bank account. The ID is created by downloading an app from whichever bank and connecting the bank account of the user.

The most well-liked of the UPI apps is BHIM, which is rolled out by the NPCI and insistently marketed by the government. This has led to BHIM turning out to be almost identicalas UPI. Now the government has permitted banks to tag BHIM with their personal apps.

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