New Delhi, Mar, 04: A majority of UPI users may stop online transactions if charges are levied, according to a survey by LocalCircles. The survey said that one of the key reasons the majority have adopted UPI is because of the zero transaction fee, and if a fee were to be introduced, many would reduce usage of UPI or stop using it depending on the fee.
The survey also found that some platforms or merchants are levying a convenience or transaction fee for UPI transactions, with 37 per cent of UPI users surveyed saying that they have had one or more such instances in the last 12 months.
Unified payments interface (UPI) transactions hit a record high of Rs 18-lakh crore in February. The Financial technology (fintech) companies last week raised the issue of implementing a merchant discount rate (MDR) for UPI transactions during a meeting with Finance Minister Nirmala Sitharaman.
The MDR on UPI payments has been a longstanding demand from the fintech industry, asserting they don’t generate revenue from such transactions. MDR is the rate charged to a merchant for payment processing services on various payment instruments.
In August 2022, the RBI released a discussion paper proposing a tiered structure charge on UPI payments based on different amount bands. Following the RBI discussion paper, the finance ministry clarified that there was no proposal to levy charges on UPI transactions. However, consumers from across India
have been reporting some platforms charging a convenience or transaction fee for UPI payments.
One of the most common example cited by consumers frequently is the Rs 20 convenience fee levied by IRCTC for UPI payments.
“Only 23 per cent of UPI users surveyed are willing to bear a transaction fee on payment. 73 per cent of those surveyed indicated that they will stop using UPI if a transaction fee is introduced,” the survey said. When asked about the frequency of UPI usage, the survey found that 1 in 2 UPI users conduct over 10 transactions every month.
The number of responses varied on each question asked in the survey. “37 per cent of UPI users surveyed claim that they have experienced a transaction fee being levied on their UPI payment once or more in the last 12 months,” the survey report said. (PTI)
