From 1st May 2019, Kotak Mahindra Bank will charge for Unified Payments Interface (UPI) transactions. These are the things you should know before making UPI transactions.
From the 1st May 2019, Kotak Mahindra Bank will charge for Unified Payments Interface (UPI) transactions. UPI was the leading contributor of the digital payments push since demonetization. However, it will no longer be free to use for peer-to-peer (P2P) transactions. For the first 30 UPI fund transfers in a month, Kotak Bank will continue to provide them free of cost and any subsequent UPI transactions will be charged.
Kotak Mahindra Bank on their website has notified that the amount charged after 30 free UPI fund transfers will be Rs. 2.50 per transaction for below or equal to Rs. 1,000. For transactions above Rs. 1,000, Rs. 5.00 per transaction will be charged along with 18 per cent GST. Industry experts say other banks are also planning to bring fees and limitations to the number of free monthly P2P transactions that can be made from one bank account, and are in talks with the National Payments Corporation of India (NPCI).
“More than 95 per cent of our customers do an average of 5-10 UPI transactions per month. While we continue to offer the first 30 P2P UPI transactions per month at no cost, charges are being introduced only for all subsequent UPI P2P fund transfers, beyond the monthly 30 free transactions,” says Rohit Rao, Chief Communication Officer, Kotak Mahindra Group. He further added, “This is intended to prevent abuse of the UPI system and will not impact genuine customers. Receiving money through UPI as well as all merchant transactions continue to be free.”
Experts suggest, levying such charges on P2P UPI transactions might not be a good idea as the digital payment system in India is still in the early stages and this can bring a negative impact on the overall digital payments ecosystem. Bigger banks like the State Bank Of India (SBI), ICICI, HDFC Bank, or Axis Bank are yet to levy such fees.
Things to know before making UPI transactions through Kotak Mahindra Bank:
- Payments made to retail merchants, for online shopping, or bill payments done via UPI will be free and will not be considered under UPI fund transfers.
- For each bank account, first 30 UPI fund transfers will continue to be free, every month.
- The charges Rs. 2.50 per transaction for below or equal to Rs. 1,000, and above Rs. 1,000, Rs. 5.00 per transaction, will be applicable for all fund transfers done via UPI using a Kotak Bank account. This will also include payment apps, such as Paytm, Google Pay, and PhonePe.
- The 30 free UPI funds transfers will also include money transfer made to any bank account using the account number and IFSC code. That will also attract the same charges as UPI transactions.