In a setback to all persons using BHIM, Phone Pe, Google Pay etc., the Banks are going to charge a specific amount for such digital transactions.
Kotak Mahindra bank has already announced that it’s going to levy charges on UPI transactions, the instant payment service provided by various wallets will no longer be free of cost.
Very soon, the other banks may also adopt such a scheme which would ultimately ruin the Government’s decision to demonetize the high-value currency notes in 2016 November to promote a cashless economy. It was said that the decision was to push the financial sector towards greater digitization and reduced reliance on cash.
Currently, UPI mode of payment is the only mode of free payment transfer in the country and has witnessed multifold growth in the country for its speed and convenience.
Charging on such transaction would largely affect the usage of such modes.
With Kotak Mahindra applying a fees on the Person to Person (P2P) fund transfer, it’s highly likely that other banks will follow suit. The bank has notified the same to some of its customers through an email which says that it will charge Rs. 2.50 for every transaction worth Rs. 1000 or less and a fee of Rs.5 will be levied on transactions above Rs.1000, which will be applicable across all the UPI platforms including Paytm, PhonePe, Google Pay and others. However, all other customer payments of online shopping, transport services and bill payments would remain free irrespective of the banks and UPI platforms.
UPI based transactions are at its peak and are increasing since the government-based payment app BHIM was introduced along with other private competitors like Paytm, Google Pay and Rupay. Paytm, Google Pay and PhonePe have recorded more than 220 million UPI transactions in January.
The NPCI, National Payments Corporation of India hasn’t commented on these new and unwanted changes on UPI transactions.
