UPI Fee Clarifications & News

Kokila Chokkanathan
📌 1. Are Normal UPI Transactions Going to Be Charged for Users?

No — regular UPI transfers between bank accounts remain free for users. Both the government and the bank OF INDIA' target='_blank' title='reserve bank of india-Latest Updates, Photos, Videos are a click away, CLICK NOW">reserve bank of india (RBI) have clarified that there is currently no proposal to impose transaction fees on everyday UPI payments made by individuals. This means you do not pay anything when sending or receiving money using UPI as of now.

  • The Finance Ministry has denied reports of new UPI charges, calling them misleading.
  • The RBI governor also said UPI is free under current rules, though running the system does incur costs for banks and NPCI.
📌 2. Why Are people Talking About UPI Charges?

There are a few reasons for the confusion:

🟡 Fees for Payment Aggregators (Back‑End)

Some banks like ICICI Bank have started charging payment aggregators (e.g., google Pay, PhonePe, Razorpay) small fees for processing merchant UPI transactions. These charges are not billed directly to users, but to the intermediaries that connect merchants with banks.

🟡 Rumours and Misinterpretations

There have been several social media rumours claiming new fees such as:

  • GST on UPI payments over ₹2,000
  • Fees on every ₹1,000 transfer
  • Mandatory charges for all UPI transactions
All of these have been officially refuted.

📌 3. What Might Be Fee‑Related (But Not for Consumers Right Now)

🟢 Merchant Discount Rate (MDR)

  • No MDR is charged on most UPI payments between bank accounts — this has been government policy to promote wallet PLATFORM' target='_blank' title='digital-Latest Updates, Photos, Videos are a click away, CLICK NOW">digital payments.
  • There have been discussions in the industry about reintroducing MDR on certain merchant UPI transactions, but nothing is finalized and there is no consumer fee yet.
🟡 Prepaid Wallet‑Linked UPI

NPCI allows prepaid wallets (PPIs) like wallets to work with UPI. Interchange fees might be charged on some wallet‑to‑merchant transactions, but normal bank account UPI transfers remain free.

📌 4. What About App‑Level “Fees”?

Some apps may show convenience or platform fees for specific services (e.g., credit card bill payments) — but these are separate from UPI itself and are charged by the app provider, not by UPI or RBI. For example:

  • Some payment apps charge extra for credit card payments done via their platform.
This does not mean the UPI payment is being charged — it’s an additional help‑fee by the app.

🟢 Key Takeaways You Should Remember

✔ UPI transfers between bank accounts are free for consumers.
✔ There is no government proposal right now to charge UPI fees.
✔ Banks may charge aggregators or intermediaries, but that doesn’t directly affect users’ charges yet.
✔ App convenience fees (e.g., for card payments) are not UPI transaction charges.
✔ The UPI system continues to be supported as a free payment method for users.

🧠 Bottom Line

No — you will not be charged for every UPI transaction.
UPI still remains free for users under current rules, and the claims about a mandatory fee on all transfers are not true. Rumours about new charges have been clarified by both the government and RBI.

 

Disclaimer:

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.

For more interesting updates click and follow Indiaherald WhatsApp channel

Find Out More:

UPI

Related Articles: