UPI Transaction Charges

Know all about the transaction charges levied on your every UPI transaction.
UPI Transaction Charges
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3 min
25 April 2024

UPI (Unified Payments Interface) has transformed how India conducts digital payments. But are there charges involved? This guide will explain UPI transaction costs, transfer limits, and free transactions, ensuring you navigate UPI with clarity.

UPI transfer limit per day

The daily limit for UPI transfers can vary depending on your bank. It typically ranges from Rs. 1 lakh to Rs. 2 lakh per day. However, it is always best to check with your specific bank to confirm their exact limit.

What is an interchange fee?

An interchange fee is a small fee that banks may charge each other when their customers use UPI for transactions. These fees are usually borne by the banks themselves and are not directly applicable to users. In simpler terms, it is a cost settlement between banks, not a direct charge to you.

How many UPI transactions will be free?

Most UPI transactions are free for most individual users. However, in 2023, a new rule introduced interchange fees for certain transactions exceeding Rs. 2,000 done through Prepaid Payment Instruments (PPIs) like mobile wallets. This means the merchant that you pay (not you) might incur a small fee for such transactions.

Here is a breakdown of who might be charged:

  • Free for individuals: Peer-to-peer (P2P) and peer-to-merchant (P2M) transactions using your bank account directly on a UPI app are typically free.
  • Potential charges for merchants: For some transactions exceeding Rs. 2,000 made using PPIs (mobile wallets), the merchant might incur a small interchange fee.

It is important to note: These are the general guidelines. Always check with your bank for their specific UPI transaction charges and any updates to the policy.

Bajaj Finserv BBPS is a leading bill payment platform that offers a secure and convenient way to manage your payments. With the added advantage of UPI payments, you can enjoy a seamless payment experience without the need for multiple payment apps. BBPS supports a wide range of billers, including utilities, insurance, and education, among others, making it a one-stop solution for all your payment needs.

Are UPI payments free or chargeable?

Unified Payments Interface (UPI) has revolutionised the way we handle transactions in India, offering a seamless and instant payment experience. One of the key attractions of UPI is its cost-effectiveness. For the most part, UPI transactions are free for users. This means that when you transfer money from one bank account to another using UPI, you typically do not incur any charges.

However, there are some exceptions. Certain banks or payment service providers may impose nominal fees for specific types of transactions, such as high-value transfers or transactions beyond a certain limit. Additionally, some third-party apps might charge a fee for premium services or instant transfers. It is always a good idea to check with your bank or payment service provider to understand any potential charges associated with UPI transactions.

Disclaimer

1. Bajaj Finance Limited (“BFL”) is a Non-Banking Finance Company (NBFC) and Prepaid Payment Instrument Issuer offering financial services viz., loans, deposits, Bajaj Pay Wallet, Bajaj Pay UPI, bill payments and third-party wealth management products. The details mentioned in the respective product/ service document shall prevail in case of any inconsistency with respect to the information referring to BFL products and services on this page.

2. All other information, such as, the images, facts, statistics etc. (“information”) that are in addition to the details mentioned in the BFL’s product/ service document and which are being displayed on this page only depicts the summary of the information sourced from the public domain. The said information is neither owned by BFL nor it is to the exclusive knowledge of BFL. There may be inadvertent inaccuracies or typographical errors or delays in updating the said information. Hence, users are advised to independently exercise diligence by verifying complete information, including by consulting experts, if any. Users shall be the sole owner of the decision taken, if any, about suitability of the same.

Frequently asked questions

Does UPI have any charges?

UPI itself generally does not have any charges for individual users for most transactions. However, there are a few things to consider:

  • Interchange fees: Introduced in 2023, these are small fees that banks may charge each other for transactions exceeding Rs. 2,000 done through Prepaid Payment Instruments (PPIs) like mobile wallets. In simpler terms, the merchant you pay (not you) might incur a small fee for such transactions.
  • Bank-specific charges: While uncommon, some banks might have their own charges for UPI transactions. It is always best to check with your specific bank for their latest policy.
What is the limit of UPI per day?

The daily limit for UPI transfers can vary depending on your bank. It typically ranges from Rs. 1 lakh to Rs. 2 lakh per day. Here is what to do to find your exact limit:

  • Check your UPI app: Many UPI apps display your daily limit within the app settings or transaction section.
  • Contact your bank: They can confirm your specific UPI transfer limit per day.

Important note: Even if your UPI app shows a Rs. 2-lakh limit, it is advisable to confirm with your bank as their policy might supersede the app's display.

How to transfer Rs. 2 lakh in one day?

If you need to transfer Rs. 2 lakh in one day and your daily limit is lower, here are a few options:

  • Multiple transfers: If your daily limit allows, you can break down the Rs. 2 lakh amount into smaller transfers spread across a few days.
  • Increased limit (if available): Some banks allow you to request a temporary increase in your UPI limit. However, this process and eligibility will vary by bank. Contact your bank to inquire about this option.
  • Alternative transfer methods: Consider using other bank transfer methods like NEFT or RTGS, which might have higher daily limits but may involve processing fees.

Remember: It is always best to plan your transfers in advance, especially for larger amounts. Knowing your daily limit and exploring available options will ensure a smooth transfer experience.

Is there tax on an UPI transaction?

Generally, there is no direct tax on UPI transactions themselves. However, the government may impose Goods and Services Tax (GST) on any fees or charges levied by banks or payment service providers for UPI transactions. For example, if a bank charges a fee for a particular type of UPI transaction, GST may be applicable on that fee. It's important to check with your bank or payment service provider to understand any potential taxes that might apply to specific charges.

How many UPI transactions are free?

Most banks and payment service providers offer a certain number of free UPI transactions per month. The exact number can vary depending on the bank's policies and the type of account you hold. Typically, individual users can expect a generous limit, often ranging from 20 to 100 free transactions per month. Beyond this limit, banks may charge a nominal fee for additional transactions.
It's advisable to review the terms and conditions of your bank or payment service provider to get precise information about the number of free UPI transactions allowed and any charges that may apply after exceeding the free transaction limit.

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