Some merchants levying fee on UPI payments, finds survey

Amid debates on a tiered structure charge on UPI payments and amid curbs on one of the biggest players, Paytm Payments Bank, a survey has found that a majority of people would stop using the real-time payment system if a transaction fee is levied.

”Only 23% of UPI users surveyed are willing to bear a transaction fee on payment. 73% of those surveyed indicated that they will stop using UPI if a transaction fee is introduced,” a LocalCircles survey said.

The survey received over 34,000 responses from citizens in over 364 districts, comprising 67% of male respondents and 33% of women.

In August 2022, the Reserve Bank of India (RBI) released a discussion paper proposing a tiered structure charge on UPI payments based on different amount bands. But soon after the finance ministry clarified that there was no proposal to levy such charges.

Despite this, the survey has pointed out that a sizable number of respondents claimed that they had experienced a transaction fee being levied on their UPI payment once or more in the last year.

37% of UPI users surveyed claimed they experienced a transaction fee being levied on their UPI payment once or more in the last 12 months, as per LocalCircles.

"One of the most common examples cited by consumers frequently is the ₹20 convenience fee levied by IRCTC for UPI payments. Several other payment gateways have also been reported to be charging a transaction fee for UPI

transactions from merchants, some of whom end up passing the same to the consumer," the survey states.

Since the survey found some platforms or merchants are levying a convenience or transaction fee for UPI transactions, LocalCircles said in a statement it would escalate the findings to the Ministry of Finance and the RBI.