Firstly, UPI stands for Unified Payments Interface, which is a popular digital payment system in India that allows people to transfer money between bank accounts instantly through a mobile app.
Recently, the National Payments Corporation of India (NPCI) announced that starting from 1st January 2021, a 1.1% charge will be levied on UPI transactions above ₹2000. This means that if you make a UPI transaction of more than ₹2000, you will have to pay an additional 1.1% charge on the amount above ₹2000.
For example, if you make a UPI transaction of ₹3000, you will have to pay a charge of 1.1% on the amount above ₹2000, which is ₹11 (1.1% of ₹1000). So, your total transaction cost would be ₹3011.
Now, the question arises, who pays this charge? According to the NPCI, the charge will be levied on the banks, and they can either pass it on to the customers or absorb it themselves. This means that some banks may choose to charge their customers the 1.1% fee, while others may not.
It is important to note that this charge is applicable only on UPI transactions made using a UPI-enabled mobile app or UPI ID. It does not apply to other modes of digital payments such as credit/debit cards, net banking, or mobile wallets.
In summary, the 1.1% charge on UPI transactions above ₹2000 is a fee levied by NPCI on banks, which may or may not be passed on to the customers. If you frequently make UPI transactions above ₹2000, it is advisable to check with your bank regarding their policy on this fee.
