UPI Transaction: Charges, Daily Limits, Guidelines and Rules

person The GST Co
calendar_today 1 நவம்பர், 2024

Introduction

Unified Payments Interface (UPI) has changed the way we make payments in India. This payment system, developed by the National Payments Corporation of India (NPCI), has made transferring money as simple as scanning a QR Code at local kirana on a smartphone.

However, as UPI transactions become a part of our daily financial habits, it is important to understand the charges, rules, and limitations associated with UPI payments, especially when it involves using a RuPay credit card.

Understanding UPI Charges

As a digital payment system, UPI transactions are free for most retail payments, which has fueled its widespread adoption. However, when it comes to certain high-value transactions, there are instances where charges may be applied.

Key Points About UPI Transaction Charges for Customers:

Are UPI Transactions Free? Typically, most UPI transactions made between individuals (P2P) and those made to merchants (P2M) are free.

Key Points About UPI Transaction Charges for Merchants:

Merchant Discount Rate (MDR) Charges When merchants accept payments via UPI, there could be a Merchant Discount Rate (MDR) applied. This is a fee merchants might have to bear to process the transaction.
UPI MDR Recovery Charges MDR recovery charges apply when merchants recover the cost of the transaction fee from the consumer. Whether a user is charged depends on the bank’s policy and the service provider.
Rupay Credit Card UPI Payment: Whenever a customer pays an amount more than 2000 using Rupay UPI Credit Card, merchant will be charged 0.5 to 1% of Transaction Amount.

RuPay Credit Card UPI Charges: What to Expect

With the introduction of UPI payments via credit cards, particularly RuPay, there have been new guidelines and fee structures introduced:

1. RuPay Credit Card UPI Charges for Transactions Below ₹2,000

For transactions under ₹2,000 made using a RuPay credit card linked to UPI, there are currently no additional charges. This initiative aims to encourage digital transactions and minimize barriers for users.

2. Charges for Transactions Above ₹2,000

When you make a payment above ₹2,000 using a RuPay credit card on UPI, a small fee may be imposed. This fee is often based on the MDR, which varies between 0.5% and 1% of the transaction amount.

3. Who Bears the Charges?

Generally, merchants are responsible for paying these transaction charges. However, in certain cases, these costs may be passed on to the consumer.

Daily Limits for UPI Transactions

UPI has set daily transaction limits to ensure security and efficient usage of the payment system. Here are the key guidelines:

1. Transaction Limits

The daily limit for UPI transactions varies from bank to bank, but the general cap for most banks is ₹1 lakh per day per account.

2. Number of Transactions

Alongside the monetary cap, there is often a restriction on the number of UPI transactions that can be performed daily, typically ranging from 10 to 20 transactions.

3. RuPay Credit Card Daily Limits

The transaction limit for UPI payments made via RuPay credit cards is governed by the credit limit of the card itself.

Guidelines and Rules for UPI Payments

Staying informed about the rules and guidelines for UPI transactions is vital for both consumers and merchants. Here’s what you need to know:

1. Transaction Authenticity and Security

Each UPI transaction requires two-factor authentication: a UPI PIN and verification through your registered mobile number.

2. Payment Reversals and Disputes

In the case of failed transactions, the amount is typically refunded within 3-5 working days. Users can raise disputes through their bank’s UPI support channels if issues persist.

3. Updates and Changes in Guidelines

NPCI and RBI periodically update the rules for UPI transactions to improve security and the user experience.

Conclusion

UPI has become an indispensable part of India’s digital payment ecosystem. While most transactions remain free, understanding when charges apply, especially with the introduction of RuPay credit cards, is crucial for managing your finances effectively. Keeping yourself updated on daily limits and MDR charges will help you avoid unexpected costs and make the most of UPI's benefits.

FAQs

What are the charges for RuPay credit card UPI transactions? For payments above ₹2,000, MDR charges may apply, varying between 0.5% and 1%.
Who will pay the UPI transaction charges? Typically, merchants bear the transaction charges, but in some cases, these may be passed on to the consumer.
What is UPI MDR recovery charge? This refers to the fee merchants may recover from consumers for processing the transaction.

Summary

UPI transactions are free for customers. However, charges may apply for high-value transactions. When merchants accept UPI payments, they may incur a Merchant Discount Rate (MDR) fee, which is usually borne by the merchant but can sometimes be passed on to consumers. For RuPay credit card-linked UPI payments, there are no charges for transactions below ₹2,000, but for payments exceeding ₹2,000, an MDR fee ranging from 0.5% to 1% may be applicable.