Demonetization led to an increase in digital transactions. People have become so enamored with digital payments that they have neglected to carry cash. Whether you wish to shop or make investments. People use UPI transactions indiscriminately, whether they want to purchase jewelry for thousands of rupees or chocolate worth Rs five. By removing the hassle of carrying change, UPI has simplified the payment process. The primary driver behind the growing popularity of UPI is its free nature as compared to credit or debit cards. While consumers and retailers can do UPI transactions without paying any fees, plans are currently underway to start charging for this as well.
Businesses getting ready to impose fees for UPI payments
In the UPI market, PhonePe and Google Pay are leading players. Following the RBI’s severe measures regarding Paytm, the platform’s user base has grown even more. Although this service is currently free, businesses are getting ready to charge for it. The Times of India story claims that revenue is a concern for fintech companies. Businesses wish to charge through UPI. Businesses claim that a system similar to a credit card with a merchant discount rate, or MDR, is necessary for long-term stability.
Fintech firms fear that their
business models may suffer as a result of zero MDR. Companies and NPCI have also talked about this. The government, however, has declined to impose levies on UPI. Allow us to explain: GooglePay and PhonePe hold an 80 percent share of the UPI market. After the strictness of RBI, Paytm’s UPI transactions have fallen, whereas companies like Google Pay, and PhonePe have benefited from it.
Seventy percent of users will cease using UPI if there are costs.
But according to a recent survey, 70% of UPI users will stop using it if fees are added to payments. The survey concluded that consumers would cease using UPI if there were any fees associated with utilizing it.
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