UPI customers take be aware! Google Pay introduces comfort payment for these transactions
Google Pay, a outstanding UPI (Unified Funds Interface) platform, has begun implementing a comfort payment for utility invoice funds, together with electrical energy and cooking fuel payments. Beforehand free for low-value transactions, the service now expenses between 0.5% and 1% plus GST for funds made utilizing credit score and debit playing cards.
This growth follows the platform’s earlier implementation of a Rs 3 comfort payment for cellular recharges applied over a yr in the past.
A overview by ET revealed {that a} buyer paid roughly Rs 15 as “comfort payment” while settling an electrical energy invoice with a bank card. The cost, which included GST, was additionally described as a “processing payment for debit and bank card transactions”.
An business insider defined to the monetary day by day that the introduction of platform charges for invoice funds by Google Pay signifies a wider motion in the direction of monetising UPI transactions, as service suppliers goal to get better fee processing prices. The supply added that fintech companies are striving to realize a steadiness between growth and sustainable income as UPI utilization will increase.
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Google Pay maintains a major market presence, dealing with roughly 37% of UPI transactions, rating second to Walmart-supported PhonePe. The platform processed UPI transactions price Rs 8.26 lakh crore as of January.
In accordance with an knowledgeable supply, charging comfort or platform charges is commonplace follow within the business. The supply indicated that whereas Google Pay beforehand lined this expense, it has now opted to switch the associated fee to customers.
Google Pay’s web site signifies that whereas comfort charges apply to card funds, UPI transactions linked on to financial institution accounts stay fee-free. The timing of when these expenses have been launched stays unclear.
For particular invoice funds together with water, piped fuel and electrical energy, PhonePe implements comfort charges on card transactions, as acknowledged on their web site. Equally, Paytm levies platform charges between Rs 1 to Rs 40 for UPI recharges and numerous utility invoice funds, together with fuel, water and bank card settlements.
UPI’s widespread adoption hasn’t translated into substantial income for fintech companies. PwC’s examine reveals that processing UPI person-to-merchant transactions prices stakeholders roughly 0.25% of transaction worth. Throughout FY24, UPI transaction processing bills reached Rs 12,000 crore, with Rs 4,000 crore spent on transactions beneath Rs 2,000.
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The Indian authorities’s coverage since 2020 has waived MDR for UPI transactions beneath Rs 2,000 to spice up digital funds. From 2021, the federal government started masking MDR prices for these smaller transactions. Transactions exceeding Rs 2,000 allow a 1.1% service provider payment.
“The Indian authorities has performed a vital function in making certain UPI’s progress, masking the prices related to low-value transactions to encourage adoption,” an business government mentioned. “Nevertheless, the absence of MDR for smaller transactions has left UPI platforms with restricted avenues to generate income straight from customers.”
UPI’s progress trajectory stays sturdy, with January 2025 recording 16.99 billion transactions price Rs 23.48 lakh crore. This reveals a 1.55% quantity improve and 1% transaction worth progress from December 2024, while demonstrating 39% year-on-year progress.
