Misinformation About 1.1% UPI Charges Above 2000 (UPI is Still Free For All)

[karankayastha]

Please note that the MDR charges will only apply to UPI transactions above 2000 made through wallets and not through bank-linked UPI. It's important to clarify that these charges will be paid by the merchants and not the customers. While it's uncertain how many people use wallet UPI transactions for amounts above 2000, it's unlikely that this change will have a significant impact. Unfortunately, there is a lot of misinformation on the internet, and many sources use technical jargon, making it difficult to understand. CNBC was one of the first outlets to report on this news, but they too failed to explain it clearly.

PS - Used Chatgpt to Create this Really impressed by the results

 

[panchabhut]

It will happen step by step

First people were asked to voluntarily "give up" lpg subsidy
Then people of a certain class were forced to give up
Then the subsidy amount was gradually brought down

As Sunil Bharti Mittal said regarding mobile call rates a decade back upon entry of Reliance CDMA in India - "Barki ko to halal hona hi, magar kiston mein"

 

[Dazzwilliams]

 

[R!ppEr]

Well when merchants have to pay, they will push the costs to the customers like they always do

 

[0xfallup]

Please find the updated information below on UPI Charges.
Types of UPI payments:1. Bank account UPI - The amount is debited from a bank account.
2. Wallet UPI - The amount is debited from a digital wallet.
3. Credit card/wallet to UPI - The amount is debited from a credit card.

Person to Person (P2P) payments: In this type of transaction, the amount is debited from one bank account and credited to another person's bank account. There are no charges for this.

Person Bank Account to Merchant (P2M) payments: In this type of transaction, the customer's bank account is debited, and the merchant's bank account or wallet is credited. There are no charges for this.

One more category is also there,
P2PM (Small merchant whose inflow below ₹50K/month): These merchants don't pay any charges for this PPI circular also (Even if amount is above ₹2K & paid via PPI)


Prepaid instruments: These include Credit cards, e-wallets(Paytm, Amazon Pay), gift vouchers, and other similar instruments. For transactions of 2000 or more using Wallet UPI or Credit card UPI (Rupay) to a merchant: The amount is debited from the customer's wallet or credit card (Rupay) and credited to the merchant. Starting from April 1, 2023, charges will apply to e-transactions, as shown in the picture below.

Only the merchant will have to pay charges, not the customer. Customers need not worry about charges unless they are paying with a wallet or credit card above 2000 and the merchant is asking for extra money for that. In my personal opinion, this may be a test run for MDR in the wallet category, and it could extend to other categories as well.

 

[Wealth is my birth right!]

It will happen step by step

First people were asked to voluntarily "give up" lpg subsidy
Then people of a certain class were forced to give up
Then the subsidy amount was gradually brought down

As Sunil Bharti Mittal said regarding mobile call rates a decade back upon entry of Reliance CDMA in India - "Barki ko to halal hona hi, magar kiston mein"

Classic example
If govt do step by step things slowly public won’t oppose

 

[R!ppEr]

wondering how will a merchant know when to charge and when to not charge. I will never tell him that im paying from a wallet

 

[RupayMan]

wondering how will a merchant know when to charge and when to not charge. I will never tell him that im paying from a wallet

This in turn will back fire us and merchant will add 1.1% for any mode of UPI above 2000..

 

[panchabhut]

wondering how will a merchant know when to charge and when to not charge. I will never tell him that im paying from a wallet

Merchant has three options.
1. completely block prepaid instruments/wallets/CC-UPI and only have bank-bank UPI
2. add 1.1% for any UPI above 2000
3. absorb the charges
Some merchants, particularly the small ones, only accept UPI and do not accept credit card. They will opt for 1 or 2. Merchants accept credit cards but add the charges (there are still such merchants) also will opt for 1 or 2. Only merchants who already accept credit cards as normal mode will opt for 3, as their cost will be less than card.

 

[Chaitanya-a]

Classic example
If govt do step by step things slowly public won’t oppose

Addiction

 

[Chaitanya-a]

Merchant has three options.
1. completely block prepaid instruments/wallets/CC-UPI and only have bank-bank UPI
2. add 1.1% for any UPI above 2000
3. absorb the charges
Some merchants, particularly the small ones, only accept UPI and do not accept credit card. They will opt for 1 or 2. Merchants accept credit cards but add the charges (there are still such merchants) also will opt for 1 or 2. Only merchants who already accept credit cards as normal mode will opt for 3, as their cost will be less than card.

I wonder why shouldn't it be implemented directly to consumer coz merchant would do that at the end

And there will be problem in bifurcating so they'll generalise it for all modes and demotivate UPI payments.

 

[Rahul Gupta]

Merchant has three options.
1. completely block prepaid instruments/wallets/CC-UPI and only have bank-bank UPI
2. add 1.1% for any UPI above 2000
3. absorb the charges
Some merchants, particularly the small ones, only accept UPI and do not accept credit card. They will opt for 1 or 2. Merchants accept credit cards but add the charges (there are still such merchants) also will opt for 1 or 2. Only merchants who already accept credit cards as normal mode will opt for 3, as their cost will be less than card.

I am a merchant myself, what should i do now? 1st option is not viable to me.

 

[Chaitanya-a]

I am a merchant myself, what should i do now? 1st option is not viable to me.

Only 1st one would make sense as no one would deny bank-bank UPI. Everyone has bank account.

 

[R!ppEr]

I am a merchant myself, what should i do now? 1st option is not viable to me.

Point 2 would be the way for u then

 

[Rahul Gupta]

Point 2 would be the way for u then

Hmm thinking of this now.

 

[RupayMan]

Hmm thinking of this now.

But check the legalities for charging 1.1% more to customer before you do, don't end up getting a case from a citizen, some will look for this things who is charging more than allowed and put a consumer case.. I understand the merchant have burden, still legal route is best and no headache

 

[SiddharthR]

Well when merchants have to pay, they will push the costs to the customers like they always do

First of all, merchants won't allow u to pay via PPI (Means they will deactivate acceptance of payment via PPI's in their respective merchant app, same like they do with DC & CC)
@Balavengat Don't think they'll charge for any UPI payment, may charge only for PPI

wondering how will a merchant know when to charge and when to not charge. I will never tell him that im paying from a wallet

U seem to be very chalak bro
(Reason in above reply)

R!ppEr: I'm paying via PPI & won't tell u
Merchant: Maine to phle hi deactivate kr rakha hai😛

 

[SiddharthR]

Person to Person (P2P) payments: In this type of transaction, the amount is debited from one bank account and credited to another person's bank account. There are no charges for this.

Person Bank Account to Merchant (P2M) payments: In this type of transaction, the customer's bank account is debited, and the merchant's bank account or wallet is credited. There are no charges for this.

One more category is also there,
P2PM (Small merchant whose inflow below ₹50K/month): These merchants don't pay any charges for this PPI circular also (Even if amount is above ₹2K & paid via PPI)

 

[SiddharthR]

Hmm thinking of this now.

Imo, don't accept PPI above ₹2K (I think many won't pay via this, as there is no incentive to customer if they pay via PPI, but may come in future. And those who pay via PPI, will mostly pay below ₹2K {As I assume they are paying via PPI to reduce small txns from Bank statement})

@VISHESH_BANSAL

 

[VISHESH_BANSAL]

Imo, don't accept PPI above ₹2K (I think many won't pay via this, as there is no incentive to customer if they pay via PPI, but may come in future. And those who pay via PPI, will mostly pay below ₹2K {As I assume they are paying via PPI to reduce small txns from Bank statement})

@VISHESH_BANSAL

For Small Merchants Paytm or Mobikwik or any other Merchant Service Provider will make changes in the system in such a way that whenever Customer will use PPI or Rupay Card for payment of More than 2000, txn will sutomatically get failed.

For Big Merchants like Petrol Pump Paytm will take consent for Accepting such Payments at Predefined MDR.