Government’s major demonetization drive, launched way back in 2016, was not only aimed at extracting hoarded black money but was also pushed for a cashless economy. It gave them the motive to digitize the payment collection system with the launch of a very simplified initiative, called Unified Payments Interface (UPI), which allows direct money transfer between two bank accounts using just another mobile app.
Now, the Modi government, which is considered to be the most tech-savvy and tech-friendly until date, jumped on the bandwagon and launched its own UPI-powered payments app called BHIM. Even most public and private banks adopted the open-source tech and either integrated UPI into their respective apps or launched standalone apps for the same.
The said UPI apps helped the country’s populace make a shift away towards the cashless economy, leaving behind cash and plastic cards, only due to the fact that it is utterly convenient and doesn’t involve any transaction fee such as NEFT or IMPS does. But, the scenario seems to be taking an 180-degree turn as UPI transactions are expected to become chargeable from the next month.
According to an email statement received by some HDFC customers, uploaded on Reddit, the bank states that it will start levying charges on UPI transactions from July 10. A transaction fee of ₹3+taxes will be charged on transaction amounts between ₹1 and ₹25,000, whereas you’ll have to shell out ₹5+taxes for transaction amounts of ₹25,001 to ₹100,000.
Presently, it seems only HDFC has sent out the following notification to all of its bank account holders. No other bank has released such a statement, so it begs the question if only HDFC is looking to levy the transaction charges or has NPCI introduced the minor change in their norms. We’ve contacted HDFC and will update you once we hear back from the private banking major. And even if NPCI has initiated the change, it is nothing to be extremely anxious and speak negatively about.
The government’s payments technology, which is being integrated with your Aadhaar credentials, has got the mover’s advantage and now plans to monetize the same for further development of the platform. Parallely, it is also building the Bharat QR platform and needs intensive cash flows, which can now be recovered and utilized from the UPI platform.
While several users on the thread have already started rebuking the move, they should know that nothing can ever be available free of cost. The installation of POS (point-of-sale) systems and other technologies requires costing, which may soon be extracted using the rumored transaction charges.
