National Payment Corporation of India, the agency for digital payments in the country, that introduced the Unified Payments Interfac for tendering of payments via digital mode is likely to take a hit at the bank's call who now begun to charge customers making payment via UPI mode. SBI has emerged as the first bank to charge for such transactions with effect from June1, 2017 and other banks are expected to follow suit with HDFC bank already reported to charge such transaction from next month.

Explaining the working of such transactions and the associated fees on it, NPCI official is quoted saying that for a UPI transaction at a merchant outlet, it is the merchant who has to pay the fees while for a peer to peer or P2P transfer, the sender needs to pay out the associated fee.

In respect of the transaction fee of such UPI based payments, officials added that the levy of such charges should be based on the number of transactions that are routed out through the platform. And it shall be best to roll-in such charges, when the number of transactions on a monthly basis crosses a benchmark of 2-3 crore. However as per reports, on an average only 1 crore transactions are routed through the UPI interface.

To assess the situation, NPCI is likely to hold a meeting with the bankers within few months. Meanwhile, it is still not clear whether the charges apply to the BHIM app.

For its proposed charges in respect of UPI payments, HDFC has out with a fee structure which includes a levy of Rs. 3 for transaction amount upto Rs. 25000 and for amount upto Rs. 1 lakh , Rs.5.

SBI has begun to charge a fee of Rs. 5 for payments upto Rs. 1 lakh and Rs.15 for transaction amount between Rs. 1 lakh and Rs. 2 lakh. While for transaction amount between Rs. 2 lakh and Rs. 5 lakh , SBI would charge, Rs. 25.

Nonetheless, in the meeting with the bankers, NPCI may ask banks not to charge for such transactions to promote digital payments and a cashless Indian economy. As per a mandate, banks are guided not to charge for person to merchant transfers via UPI mode while there is no mandate for P2P transfers and it is at the discretion of bankers to charge or not charge.

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