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Tag: UPI

UPI Payment Attracts Charges From April 1: Check Details

Posted on by Sudeshna Mishra

Prepaid Payment Instruments (PPI) charges will be imposed on merchant transactions on the Unified Payments Interface (UPI) starting on April 1, according to the National Payments Corporation of India (NPCI).

In a recent circular titled Prepaid Payment Instruments (PPI) fees on merchant transactions on Unified Payments Interface (UPI), the UPI governing body stated that transactions using PPIs on UPI would be required to pay 1.1% of the transaction value for amounts over Rs 2,000. On April 1, 2023, the interchange charge will be implemented, and it will then be revisited once again by September 30, 2023.

The use of wallets or cards as prepaid payment instruments (PPIs) for transactions amount more than Rs 2,000 will incur these charges. In light of this, this interchange fee will not apply to payments made using UPI, such as Paytm, Phonepe, or Google Pay, to friends, relatives, or anybody else, or to a merchant’s bank account.

NPCI stated in a tweet: “UPI is free, fast, secure, and seamless. Every month, over 8 billion transactions are processed free for customers and merchants using bank accounts.”

The interchange fee is charged in connection with card payments and is used to mitigate the expenses of transaction authorization, processing, and acceptance. Banks and payment service providers expect to increase their revenue by implementing interchange fees.

The interchange fee will be charged on a variety of services in the range of 0.5% to 1.1%. Fuel will be subject to an interchange fee of 0.5%; telecom, utilities/post office, education, and agriculture will have a fee of 0.7%; supermarkets will have a fee of 0.9%; and mutual funds, the government, insurance, and railroads will have a fee of 1%.

Transactions between a PPI wallet and a bank account that are peer-to-peer (P2P) or peer-to-peer-merchant (P2PM) would not be subject to the interchange charge. A wallet-loading service fee of about 15 basis points will be paid by the PPI issuer to the remitter bank.

Almost 99.9% of all UPI transactions have historically been made via the method of involving a bank account in a UPI-enabled app for payment.

According to the NPCI’s circular, the proposed interchange charge is in line with the World Bank and Council on Payments and Market Infrastructures’ suggestions for an interchange charge of up to 1.15 percent for UPI transactions.

The Reserve Bank of India (RBI), the principal regulator of payment systems in India, is ultimately responsible for making the final decision. The NPCI has sent its suggestion to the RBI, and now it must wait to see if the RBI will accept it.

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Daily UPI Transactions Across The Country Exceeded 36 Crore In One Year

Posted on by Sudeshna Mishra

The RBI Governor Shaktikanta Das on Monday announced that daily UPI (unified payment interface) transactions across the country surpassed 36 crores in one year, a 50 percent jump from 24 crores in February 2022.

In terms of value, these transactions are worth ₹6.27 lakh crore, which is registering a growth of 17 percent from ₹5.36 lakh crore in February 2022. At the RBI headquarters, While launching Digital Payments Awareness Week, the governor discloses this data to the reporters. He also said that the total digital payment transactions crossed over Rs 1,000 crore each month during the last three months.

He also said that the success story of India’s payment systems tempts several other countries to adopt them. They have shown their interest in replicating this system. It’s a matter of pride. Since December 2022, India’s payment systems have a record of over 1000 crore transactions per month. This shows its acceptance by consumers due to its robustness to payment systems. According to the recent report of a pan-India digital payments survey, out of 90,000 respondents, 42 percent of respondents are using digital payments.

In volume terms, in January 2023, the number of UPI transactions crossed 800 crores, while NEFT (National Electronic Funds Transfer) saw a daily volume of 3.18 crore transactions on 28 February.

Since the launch of UPI in 2016, it has appeared as the most popular and preferred payment mode, leading person-to-person and person-to-merchant transactions accounting for 75 percent of total digital payments.

On the tokenization exercise, he said that RBI had tokenized over 48 crore cards, which managed over 86 crore transactions, which makes it the world’s largest tokenization exercise. The tokenized transactions have grown from 35 percent initially to 62 percent.

The acceptance of digital payments infrastructure has increased from 170 million touch points to 260 million touch points, which shows a growth of 53 percent.

The governor also launched the ‘Har Payment Digital’ mission which aims to strengthen the RBI’s commitment to deepening digital payments in the country.

While UPI has allowed the digital payments facility to retail outlets, kiranas, street vendors, small or large business people, etc., Bharat Bill Payment System (BBPS) has ensured the shift of bill payments from cash/cheque to digital mode and National Electronic Toll Collection (NETC) ) system has focused on shifting the toll payment to digital mode.

The governor further said that the RBI has decided to adopt 75 villages to mark 75 years of independence. Under this program, Payment System Operators (PSOs) will choose 75 villages and convert them into digital payment-enabled villages.

The RBI Deputy Governor Rabi Shankar said that the financial formalization of the economy is essential as money is at the core of any economy. He added that RBI’s Digital Vision 2025 is to make digital payments available everywhere and every time so that everyone can make digital payments. In the last five years, digital payments have grown 15 percent annually, he said.

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Paytm Launch UPI Lite On Its Platform

Posted on by Tanmaya Dev

As every month billions of transactions happen over UPI every day, failure of the link is very common. To address this problem, the National Payments Corporation of India (NPCI)  introduced UPI Lite last year in September. UPI Lite is a lighter and more efficient version of UPI for smaller transactions. Currently, Paytm has applied the UPI Lite to its own payment platform.

UPI Lite is the feature enabled by NPCI only for the self-developed BHIM App. The development of this feature was intended to allow users to quickly carry out small transactions of up to Rs 200 with a single touch.

For the first time, a third-party app, Paytm, gain the support for the UPI Lite to introduce it on its platform. The company claims that UPI Lite will enable faster real-time transactions. Even during high transaction hours, UPI Lite will “never fail.”

It is similar to Paytm wallet payments, but whenever users make a payment, it does not ask for a pin. Users can do multiple small-value UPI transactions of up to Rs 200 at a time. Additionally, they can also back the UPI balance to the same bank account anytime without any charge.

With UPI Lite, only a single money transfer entry is performed in the user’s bank account, which declutters bank statements. Users will receive a daily SMS containing the history of all UPI Lite transactions made during the previous day from the bank.

Currently, 9 banks support Paytm UPI Lite, including the State Bank of India, Canara Bank, Central Bank of India, Indian Bank, HDFC Bank, Kotak Mahindra Bank, Union Bank of India,  Utkarsh Small Finance Bank, and Punjab National Bank.

Paytm is offering its users a Rs 100 cashback for activating UPI Lite for the first time and adding Rs 1,000 as a balance in the wallet.

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After Singapore, UPI May Extend To Other Nations

Posted on by Sudeshna Mishra

Following Singapore, the Reserve Bank of India (RBI) is in talks with several nations, including United Arab Emirates(UAE), Indonesia, and Mauritius, to establish a direct digital payment link of India’s Unified Payments Interface (UPI) with these countries. This will allow the citizens of those countries to make cheaper and quicker fund transfers using mobile phones.

According to a senior RBI officer, some Latin American nations have shown their interest.

The central bank is publicizing UPI and the Central Bank Digital Currency (CBDC), also known as the digital rupee, to the attendees at the event and also permits foreigners to use UPI.

The regulator and the government are willing to expand UPI payment links to facilitate fund transfers, eliminating the high costs charged by banks and reducing the processing time. This decision is thought to be beneficial, especially for the Indian diaspora.

Additionally, the RBI said that the usage of UPI for non-resident Indians (NRI) would also become operational in the coming month, enabling them to use the tool through international phone numbers.

Due to technical issues, the tool could not be used though being enabled.

When asked about the central bank’s digital currency, the RBI stated that they are trying continuously to ramp up the pilot to cover as many as possible in a closed user group.

The RBI is now looking to extend to more areas and includes more banks on the retail side, where pilots are already going on in a number of cities.

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India Singapore Link Digital Payment Systems For Cross-Border Remittances

Posted on by Sudeshna Mishra

India and Singapore on Tuesday launched the linkage between Unified Payment Interface (UPI) and Singapore’s PayNow to enable cost-efficient, fast, and safe transfer of cross-border remittances. PM Narendra Modi and Singapore PM Lee Hsien Loong virtually witnessed the launch of cross-border connectivity. According to official information, the link was launched during the virtual ceremony by Reserve Bank of India (RBI) governor Shaktikanta Das and Ravi Menon, managing director of the Monetary Authority of Singapore (MAS), by symbolically transferring funds to each other from the mobile phones.

For India, the connection between UPI and PayNow is the first cross-border person-to-person (P2P) payment link and the second for Singapore.

PM Narendra Modi said that the connection between UPI and PayNow is a gift to the citizens of both countries with a cheaper and real-time facility for remittances. This facility will benefit our overseas brothers and sisters, students, professionals, and their families. With this linkage, a new chapter opens in cross-border fintech connectivity.

Now, citizens can send and receive funds between bank accounts or e-wallets in real time by using their UPI ID, mobile phone number, or virtual payment address (VPA).

The banks participating from the Indian side are ICICI Bank, Axis Bank, DBS India, Indian Bank, State Bank of India, and Indian Overseas Bank. From the Singapore side, the participants are Liquid Group and DBS.

Through the new link, Indians can transfer upto a maximum of  Rs. 60,000 a day, and Singapore’s DBS allows its selected customers to transfer up to 200 per transaction. By the 31st of March, DBS allows all its customers to transfer upto SGD1000.

Deputy Governor of RBI, T Rabi Shankar, said that linking the payment networks across borders was a part of the G20 agenda to minimize the costs of cross-border remittances. He also added that currently, transfers happen through banks but attract a certain cost and time as India is a country with capital controls.

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