According to a report by Ashish Das of IIT Bombay, lenders are interpreting the law accordingly, concluding that “payments” must be free and “transfers” are chargeable.
Most private banks charge Rs 2.5-5.5 for person-to-person payments via the Unified Payment Interface (UPI) more than 20 times a month.
Although the government has banned such fees, bankers have said they introduced fees to prevent frivolous transactions from weighing on the system, The Times of India reported.
According to a report by Ashish Das of the Indian Institute of Technology (IIT) in Mumbai, lenders interpret the law accordingly, concluding that “payments” should be free, but “transfers” are chargeable.
According to Das, payments are not separate from transfers. “Paying off a small person-to-person loan is a payment. Giving money is also a payment. A small cobbler on the road who receives payments or a student who makes a payment A teacher can do anything with UPI if the law does not require the beneficiaries to become merchants (as defined by UPI) to make said received payment, ”he said. to The Times of India.
The value of UPI transactions has increased in the wake of the COVID-19 pandemic. UPI transactions worth Rs 2.9 billion were recorded in July 2020 compared to Rs 1.46 billion in the same period last year.