The most popular medium of digital payments in India, Unified Payments Interface (UPI), is constantly evolving. In this episode, a leading private bank of the country, ICICI Bank, has made an important announcement for its customers and especially merchants. From August 1, i.e., tomorrow, transaction fees will be levied on UPI payments made through Payment Aggregators (PAs).
This news may surprise you, but the relief is that this charge will not be taken directly from the customer’s account, but from the merchant’s account. The merchant here addresses shopkeepers, restaurant owners, and other businessmen who accept payments through UPI. Let us first know in detail how much this charge will be and what the rules are for collecting it.
How much charge will have to be paid, and when will it be levied?
ICICI Bank has fixed charges in two different slabs on UPI transactions made through payment aggregators. If a merchant has an Escrow Account in ICICI Bank PA, then he will have to pay a charge of 0.02 percent per transaction. The maximum limit of this charge will not exceed ₹ 6, no matter what the amount of the transaction is. At the same time, merchants who do not have an Escrow Account in ICICI Bank PA can be charged a charge of 0.04 percent per transaction. In this case, the maximum charge per transaction will not exceed ₹ 10.
When will the charge not be levied
An important relief is that if a UPI transaction is transferred directly to the merchant’s ICICI Bank account (ie, not through a payment aggregator), then in such a situation, no charge will be levied. This is beneficial for merchants who receive UPI payments directly into their bank account.
Why is this charge being levied
The government has clarified that no Merchant Discount Rate (MDR) is charged from merchants, and currently it is zero. However, the National Payments Corporation of India (NPCI) charges switch fees from banks. Some banks are now charging this switch fee from payment aggregators, and payment aggregators are charging it from merchants. This charge is being taken mainly to cover the cost of operating and maintaining the payment ecosystem.
These rules of UPI will also change
Recently, UPI users had to face problems while making payments many times, such as the UPI server going down. To solve these problems and save users from any trouble with important payments, NPCI (National Payments Corporation of India) has imposed new limits on some rules of UPI payments:
A limit will be imposed on the number of times you can check your bank account balance in apps. This will reduce unnecessary load on the server. The Autopay feature will now work only within a certain time frame. This means that Autopay transactions will only happen at scheduled times, reducing the load on the system and increasing efficiency. A limit will also be imposed on checking the payment status repeatedly. This will help keep the server stable.
A limit will also be imposed on the number of payment reversals. This will help prevent fraud and misuse of the system. These limits have been imposed so that users do not face any problems with important payments. NPCI has found a solution to this problem so that the efficiency and reliability of UPI are maintained.