An article that takes you through what UPI trading fees are in India www.deekpay.com

What is UPI

National Payments Corporation of India (NPCI) has developed the Unified Payment Interface for India, viz.UPIUPI allows real-time transfers between personal accounts, bank and merchant accounts via mobile devices.UPI also facilitates instant inter-bank payments, making online payments convenient and fast.UPI is currently the most popular payment system in India.

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What is a Prepaid Payment Instrument (PPI) in UPI?

Prepaid payment instruments (PPIs) in UPI are those that allow individuals to deposit money and make real-time payments onlinedigital wallet. Wallets, smart cards, prepaid gift cards, vouchers and magnetised chips also fall under PPI.

When the data is transferred via a wallet (e.g. PhonePe (Wallet) ScanningUPI QRcode to make a transaction, i.e. payment via PPI. More examples of wallets include Paytm Wallets, SODEXO vouchers, Amazon Pay, Freecharge wallets and more.

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UPI Daily Transfer Limit

foundationNPCIA daily transaction limit of Rs. 10 lakh has been prescribed for UPI. However, the limit for payments to educational institutions and healthcare is Rs 5 lakh. The maximum daily transfer limit for UPI may vary from bank to bank, ranging between Rs 25,000 and Rs 10 lakh. Some banks will alsoUPI transfersLimits are set to weekly or monthly, not daily.

UPI transaction limits for major Indian banks

The common limit set by NPCI is Rs. 100,000 per day or a maximum of 20 transactions. However, different banks may have their own limits.

Bank UPI Daily Limit UPI Transaction Limit SBIRs. 100,000Rs. 1,00,000IDFCRs. 100,000Rs. 25,000PNBRs. 50,000Rs. 25,000Indian Overseas BankRs. 100,000Rs. 50,000Bank of IndiaRs. 100,000Rs. 10,000Allahabad BankRs. 100,000Rs. 50,000ICICIRs. 100,000Rs. 100,000India BankRs. 100,000Rs. 100,000Rs. 100,000HDFCRs. 100,000Rs. 100 ,000(Rs 5,000 for new customers)Canara BankRs. 100,000Rs. 100,000Axis BankRs. 100,000Rs. 100,000Bank of BarodaRs. 25,000No provision Induslnd BankRs. 100,000Rs. 100, 000IDBI BankRs. 100,000Rs. 100,000 000IDBI BankRs. 100,000Rs. 100,000Union Bank of IndiaRs. 200,000Rs. 100,000

SBIbankingUPI TradingThe limits are detailed below:

Single Transaction Limit - The maximum amount that can be transferred in a single UPI transaction is Rs. 1,00,000 as determined by the National Payments Corporation of India (NPCI). Daily Transaction Limit - SBI has a daily transaction limit of Rs. 1,00,000 for UPI transfers. This limit is applicable irrespective of whether the transaction is made through a single transfer or multiple transfers with a maximum of 10 transactions per day. Weekly and Monthly Limit - Unlike the daily limit, there is no specified limit on the total value of UPI transfers on a weekly or monthly basis.

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Surcharges/interchange fees paid by UPI

Interchange fees are charged when a UPI transaction is made through a PPI, such as a wallet. The interchange fee is associated with card payments and covers the cost of processing, accepting and authorising transactions. This fee is similar to the merchant discount rate applied to credit cards. It increases revenue for payment service providers and banks.

In a UPI transaction, an interchange fee is a transaction fee that a merchant must pay when a customer processes a transaction. Therefore, when a customer uses a PhonePe QR code in a shop to send a transaction via theUPI paymentsAt that time, the merchant shall pay an interchange fee to the payment service provider (i.e., PhonePe).

Interchange fees apply in the range of 0.5-1.1% for different services. An interchange fee of 0.5% applies to fuel payments, 0.7% to post offices, telecommunications, utilities, agriculture and education, 0.9% to supermarket payments, and 1% to insurance, mutual funds, government and railways.

New rules on UPI transaction fees

In order to expand the scope of UPI, the Reserve Bank of India has proposed several changes in its relevant rules and regulations. Most of these have come into effect from 1 January 2024 onwards. These include important guidelines on transaction costs for UPI.

Under the new rules, an interchange fee of up to 1.1% will be charged for UPI transactions above Rs 2,000 crore through PPI from 2024 onwards.

Does the customer have to pay an interchange fee for UPI payments made through the wallet?

For Peer-to-Peer (P2P) and Peer-to-Merchant (P2M) transactions, customers do not need to pay for the PPI-enabledUPI paymentsPayment of interchange fees. a P2P transaction means the transfer of an amount between two individuals or personal accounts via UPI. a P2M is a customer's payment of a purchase fee to a merchant via UPI.

One bank charges another bank an interchange fee for processing a transaction. In the case of UPI transactions, the merchant bank (the business or individual receiving the payment) pays an interchange fee to the paying bank (the payer).

Therefore, the interchange fee applies only to PPI merchant transactions and the customer does not have to pay anything. When UPI is linked to a bank, the customer or user does not have to pay an interchange fee for UPI payments. When UPI is linked to a wallet, the merchant pays the interchange fee. The interchange fee also does not affect customers who make UPI payments to family, friends, other individuals or merchant bank accounts.

Which UPI deals are free?

The new UPI transaction fee of up to 1.1% applies to merchants using PPI (e.g. mobile wallet) to accept payments above Rs 2,000. Individuals using UPI for personal transactions will not have to pay any fees. Therefore, UPI payments for personal transactions of any amount are free.

Are UPI payments free or is there a fee?

There are no additional fees for making payments through UPI. Thus, UPI payments for individuals making personal transactions are free of cost. However, a fee will be charged for digital wallet transactions above Rs. 2,000. Users do not have to pay this fee, merchants have to pay the interchange fee.

Who pays for the exchange?

Merchants pay an interchange fee to the issuer or wallet. The interchange fee is applicable to small shopkeepers; therefore, it does not affect them. Medium-sized shopkeepers will have to pay the interchange fee only for transactions above Rs 2,000. However, for high-value transactions, the payment of interchange fee will depend on whether the merchant wants to absorb the higher cost or decides to pass on the higher cost to the customer.

Accordingly, NPCI requires PPI issuers to pay 15 basis points of wallet top-up service charge to the remitting bank for top-up of wallets exceeding Rs 2,000.

For example, if you recharge your PhonePe wallet beyond Rs. 2,000, PhonePe will pay 0.15% to your bank for the wallet recharge service. Hence, you do not have to pay any additional charges for recharging your wallet for UPI transactions.

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