Make Sure You’re Aware of the UPI Transaction Charges of your Bank 

UPI is a virtual platform which lets users send and receive money instantly on a real-time basis by using the VPA (Virtual Payment Address) and a UPI PIN. It is Digital India’s most popular and user-friendly payment system, the main reason being free of cost. However, recently there has been plenty of news regarding upcoming changes in UPI charges. Let's look if that's true.

UPI was curated by the National Payments Corporation of India (NPCI) and powered by the Reserve Bank of India for the sole purpose of delivering an instant payment system through the IMPS structure. It lets users instantly send and receive payments among each other.

No bank account details or any other details are required for UPI transactions. You can simply make payments with just a UPI PIN and the recipient’s VPA or mobile number. UPI PIN which is a 4-6 digit passcode is very essential to make transactions. When you register with an UPI app, you have to create a UPI PIN for the functioning of the app. Now coming to the actual news.

What are the UPI Charges for Transactions?

The most successful payment system of India, UPI, is now made compatible with most of the Indian banks and electronic wallets such as Google Pay, PhonePe, BHIM UPI, Paytm, etc. However the pressing question is whether UPI charges a transaction fee for the payments or not.

As we all know UPI is free of cost but word has been spreading around that suggests otherwise pointing that some banks may be fixing charges for UPI transactions. Payment sources like NEFT, IMPS etc are also building a particular charge on different transaction volumes. The NPCI has also removed payment service provider (PSP) fees for all domestic UPI peer-to-merchant (P2M) transactions till further notice during Feb 2020.

Expected Cost of UPI Transactions

The first bank to introduce UPI transaction charges was Kotak Mahindra Bank in the month of Feb 2020 and then other banks also started charging for the UPI transactions. Banks such as HDFC, Axis, SBI providing UPI services are soon going to charge users for P2P transactions.

Kotak Mahindra Bank UPI Transaction Charges & Free Transaction Count

Kotak Mahindra bank started to apply a UPI transaction fee on each transaction after you cross the first 20 free UPI transactions. You can avail 20 free UPI transactions each month and when you cross the 20th transaction you will be charged based on your payment volume. For transactions below Rs. 1000, you will be charged Rs. 2.50 per transaction and for transactions above Rs.1000 you will be charged Rs. 5. These charges were put into action from 1st March 2020.

Slab

For transactions less than

or equal to Rs. 1,000

For transactions above

Rs. 1,000

Upto 20 transactions

Zero Charges

Zero Charges

21st transaction onwards

Rs 2.50 *  per transaction

Rs 5.00 *  per transaction

AXIS Bank UPI Transaction Charges & Free Transaction Count

Axis Bank has applied a transaction fee on UPI transactions of Rs. 1000 or more once a user crosses the monthly limit of 20 free transactions. It is said that Axis Bank has notified its customers about the new change via emails stating that there will be 20 free transactions in a month and post consuming the quota the users will be charged as per the volumes of their transactions.

Slab

For transactions less than

or equal to Rs. 1,000

For transactions above

Rs. 1,000

Upto 20 transactions

Zero Charges

Zero Charges

21st transaction onwards

Rs 2.50 *  per transaction

Rs 5.00 *  per transaction

 HDFC Bank UPI Transaction Charges & Free Transaction Count

Similarly, HDFC Bank has also sent notification to its customers informing about the UPI transaction charges which will be charged as per the volumes of the transactions. It will also have the same 20 free transaction limit for a user every month for P2P transfers. Additional transactions will be charged even if it is Rs. 1001 or more. These limits will be applied from 3rd May 2020 onwards. 

The charges for P2P fund transfers via UPI are as follows:

Slab

For transactions less than

or equal to Rs. 1,000

For transactions above

Rs. 1,000

Upto 20 transactions

Zero Charges

Zero Charges

21st transaction onwards

Rs 2.75 + applicable GST

Rs 4.75 + 

applicable GST

Bank Of Baroda UPI Transaction Charges & Free Transaction Count

There is no update on charges on UPI Transaction from BOB Bank. We will update once there is any official announcement from BOB.

SBI Bank UPI Transaction Charges & Free Transaction Count

There is no update on charges on UPI Transaction from SBI. We will update once there is any official announcement from SBI.

ICICI Bank UPI Transaction Charges & Free Transaction Count

There is no update on charges on UPI Transaction from ICICI Bank. We will update once there is any official announcement from ICICI bank.

Conclusion:

Bad news is the information about the UPI transaction fee is true but the good news is that as compared to other payment modes offered by the RBI, the charges for UPI are indeed very less and affordable. Also, note that the transaction charges are applicable only when you exhaust the free transaction limit in a month. Once you cross this limit, you will be charged Rs. 2.50 for transactions below or equal to Rs. 1000 and Rs. 5 will be charged for transactions above Rs. 1000 plus 18% Goods and Services Tax (GST) will also be charged on such transactions.