According to news reports, UPI payments would be costly. 1.1 percent of transactions over Rs 2,000 will be charged. If you spend over 2,000 rupees using a digital service like Google spend, Phone Pay, or Paytm, you may have to lose a little more money from your pocket, but there are screws. Nothing has changed for you if you make a payment that is linked to your bank account.


When will the UPI payment be charged?

In its circular, the National Payments Corporation of India (NPCI) warned that you would be charged a 1.1% fee for payments above Rs 2000. Following this information, various inquiries began to surface in people's thoughts. For example, will UPI become more expensive for users due to this decision?


Will this charge be imposed on all types of online payments, or will it affect any particular segment?

This change will only impact customers, according to NPCI's circular. Customers are not required to pay any additional fees. There won't be required to pay any fees for UPI transactions linked to bank accounts. They are as free as ever. The merchant will be responsible for exclusively covering any fees associated with the PPI wallet. 


Will UPI payment become expensive?

The NPCI circular states that this fee will be applied to merchant UPI transactions. That is, peer-to-peer and peer-to-merchant transactions between banks and prepaid wallets will not be subject to this fee. So, customers, do not worry. UPI can be used without concern and without paying extra money. UPI payments are completely free. So, for you, nothing has changed. Regarding UPI Bank Transfer, nothing has changed.


Who will have to pay the charge?

The new deal only applies to wallets and PPIs. For example, if you conduct a transaction from your wallet that totals more than Rs 2,000, an interchange fee may be assessed; nevertheless, the retailer will bear the cost of this fee. You must pay an interchange fee if you make a UPI payment using a prepaid payment instrument (PPI), such as a wallet or credit card. 1.1% of the total amount you pay the seller will go towards this fee.


Additionally, when the transaction exceeds 2000 rupees, this is exactly the same as how debit and credit cards operate. Transactions from one bank to another are still totally free. The merchant will want payment for this charge. Here, the term "merchant" refers to the shopkeeper you will be paying through UPI.


What option to choose?

No fees would be charged on peer-to-peer and peer-to-peer-merchant transactions involving bank accounts and prepaid payment instruments, according to NPCI's circular. (PPIs). It was stated in the circular not to apply this to P2P or P2M transactions. However, you will be responsible for some fees if you pay a person or a store using your bank account as your payment method. It is preferable to select the bank account option while using UPI to minimize any fees.


If there is still confusion, then understand this.

Payment service providers pay interchange fees to wallet issuers like banks. These wallets support only online payment enablers like Paytm, PhonePe, GooglePay, etc. The news won't affect you if you can understand it in a single sentence. You won't be charged anything for the transaction from the wallet either. The bank and the merchant are the only parties involved in this matter.


You won't be charged anything if you pay using UPI. There is no fee involved, even if you use your wallet. The shopkeeper whose scanner you have paid for and his bank must resolve this charge. As of April 1, it will become more expensive for the retailer. The shopkeeper must pay an interchange fee of 1.1% on the money when it is transferred through UPI QR to his bank account.