Nearly two years after operationalisation of the Unified Payment Interface (UPI), banks have started moving to charge for peer-to-peer payments on the new platform. Country’s largest lender State Bank of India has came out with charges with effect from June 1, while the second largest private sector lender HDFC Bank has also gone public with its rate structure which will be effective July 10. “So far, no bank is charging for UPI transactions but at the same time it is at their discretion to levy a reasonable fee towards Person to Person (P2P) transactions for UPI and IMPS,” National Payments Corporation of India’s chief operating officer Dilip Asbe said in a statement. A senior NPCI official explained that worldover, charges are levied for such transactions and added that in case of UPI at merchant transactions it is the merchant who pays while for P2P, it is the sender who has to pay. On the transaction fees front, the critical aspect to be examined is whether there are enough number of transactions happening on UPI which establish a maturity of the platform and also the reasonableness of charges, the official added. The UPI platform is averaging around one crore transactions with a value of Rs 2,900 crore per month, the NPCI official said, adding the number of transactions needs to be at least 2-3 crore per month for the charges to set in.
The NPCI official said there may be a review on the subject, saying there can be a meeting with bankers which can be called in the next two months to assess the situation. It was, however, not immediately clear if the P2P transactions on the BHIM App launched by Prime Minister Narendra Modi, will also be chargeable. When contacted, SBI’s deputy managing director Manju Agarwal acknowledged that the bank has put out a circular on UPI charges on its website, but promised to withdraw it soon. “We are not charging for UPI transactions. The circular will be removed,” she said.
An HDFC Bank spokesperson was not reachable for comment, but a senior official pointed out that the charges are applicable from July 10 and there may be a review based on the outcome of such a meeting with NPCI. SBI is charging Rs 5 per transaction of up to Rs 1 lakh, Rs 15 for transactions between Rs 1-2 lakh and Rs 25 for those between Rs 2 lakh and Rs 5 lakh, while HDFC Bank is proposing Rs 3 for transactions of up to Rs 25,000 and Rs 5 for those between Rs 25,000 and Rs 1 lakh. Billed as a game changing platform in the Indian banking space, UPI was launched in April 2015 and operationalised in August same year.