A recent survey by LocalCircles reveals that 75% of users are against the new UPI regulations introduced by the National Payments Corporation of India (NPCI). The survey also suggests that many users may stop using UPI if these rules come into effect. In contrast, 22% of users expressed a willingness to comply with the updated policies.
What Are The New NCPI Rules?
Starting October 16, 2024, NPCI will introduce a surcharge and interchange fee on UPI payments involving Pre-Paid Instruments (PPIs) like Google Pay and Apple Pay. These fees will be borne by merchants based on the transaction type:
- Fuel: 0.5%
- Insurance, mutual funds, railway: 1.1%
- Supermarkets: 0.9%
- Post office, telecom, utilities, agriculture, education: 0.7%
According to NCPI guidelines of 2024, customers will not have to bear the processing fee for the Peer-to-Peer (P2P) and Peer-to-Merchant (P2M) transactions, i.e., no fee will be charged for transferring an amount between two individuals or individual accounts through UPI or when customers make payments through UPI to merchants for purchases. However, merchants will be charged up to 1.1% on transactions above INR 2000.
Why 75% Of Users May Stop Using UPI Transactions?
Despite merchants being responsible for the fees, customers fear that the added costs will eventually be passed on to them, similar to credit and debit card transactions. The LocalCircle survey found that “38% of respondents indicated that they are conducting over 50% of their payment transactions via UPI, and 37% were found to be conducting over 50% of their payment by value. With UPI rapidly becoming an integral part of nearly 4 in 10 consumers, there is strong resistance to any kind of direct or indirect transaction charges being imposed.”
