Cashless Not Free Anymore? Private Banks Charging For More Than 20 UPI Transactions
New Delhi: Are you among those who are splitting the bill via Google Pay or PhonePe with friends? Did you know that some private banks like Kotak, Axis, ICICI and HDFC have started charging for peer-to-peer (P2P) transactions beyond 20 per month?
The huge volume of transactions is reportedly putting a load on the system, which is why such a decision was taken at a meeting of banks with National Payments Corporation of India (NPCI) on February 14, 2020. The UPI Steering Committee of NPCI agreed to limit free P2P fund transfer transactions to 20 per month at that meeting.
For transactions below Rs 1,000, the charge will be Rs 2.50 beyond the free limit. For transactions above Rs 1,000, the UPI fees will be Rs 5. An additional 18 per cent GST is not included.
Kotak Bank, which has reportedly sent notifications to customers regarding the charges, has increased the cap on number of free transactions to 30 peer-to-peer transactions per month.
Merchant payments, online shopping, bill payments etc. will, however, continue to be free. Only person to person (P2P) fund transfers would be chargeable.
UPI is fast replacing cash transactions in many places, and is growing at nearly 8 per cent month on month during lockdown period. There were 80 crore transactions in April 2019, a figure expected to reach 160 crore in August 2020.