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Everything You Need to Know About UPI Transaction Charges 2023:The Ultimate Guide

UPI Transaction Charges 2023

upi transaction charges 2023
upi transaction charges 2023 (Source: pinterest)

Recently, the National Payments Corporation of India (NPCI) announced in a circular that an interchange fee ranging from 0.5% to 1.1% will be charged on transactions done using prepaid payment instruments that are over Rs 2,000.

Starting on April 1st of 2023, a fee for digital wallet transactions processed over the Unified Payments Interface (UPI) will apply.

The fee will vary depending on the kind of service offered.
For example, 0.5% will be added to payments for fuel, 0.7% will be added to payments for telecom, utilities/post office, education, and agriculture transactions, and 1% will be added to payments for court fees, tax payments, and insurance sales.

PPIs, which are the most widely used apps for UPI transactions, are digital wallets that let users store money and send and receive payments.
Examples of these apps are Google Pay, PhonePe, and Paytm.

Beginning on April 1, the bank of the merchant (the person or business receiving the payment) will pay the bank of the payer the interchange charge anytime they are used to complete a UPI transaction. (the person making the payment).

As a wallet-loading service fee, the PPI issuer will pay the remitter bank roughly 15 basis points.

The merchant, who will be charged this cost, may or may not pass it on to the customers.

Since the majority of transactions made through these applications are currently under Rs 2,000, the majority of PPIs are currently reluctant to do so.

Additionally, if they charge their consumers a price, they risk losing those customers to a rival business that may be ready to pick up the tab instead of the customer.

Paytm has already stated that there will be no charges for users.

Additionally, routine UPI payments, such as those sent from one bank account to another—which, according to the NPCI, account for 99.9% of all UPI transactions—are exempt from this fee.

On the UPI platform, there are 5 crore merchants and around 25 crore unique users.

The UPI processed 753.4 billion transactions in February of this year, totaling Rs. 12.35 lakh crore.

The UPI system is managed by the NPCI, which said that the action was taken to boost UPI interoperability and boost income for banks and payment service providers.

By September 30, 2023, this pricing will be re-evaluated.

NPCI (Source: NPCI Site)


The Unified Payment Interface (UPI) is a real-time fee machine evolved via way of means of the National Payments Corporation of India (NPCI).

It allows users to transfer money from one bank account to another using a mobile phone.

UPI is an instant payment system that enables inter-bank transactions 24×7, 365 days a year.

It was launched in 2016 and has since then become the most preferred mode of payment in India.

How does UPI work?

UPI works on top of the Immediate Payment Service (IMPS) platform, which is a real-time interbank electronic fund transfer service.

To use UPI, you need to link your bank account to a UPI-enabled mobile app.

Once you have linked your bank account, you can create a Virtual Payment Address (VPA), which is a unique identifier that you can share with anyone to receive payments.

To make a payment using UPI, you need to enter the recipient’s VPA, enter the amount to be transferred, and authenticate the transaction using a UPI PIN.

The payment is instantly transferred from your bank account to the recipient’s bank account.

Advantages of UPI:

UPI Instant Transactions:

UPIs enable instant fund transfers, which means that you can send or receive money in real-time.

No need to remember bank details:

With UPIs, you do not need to remember the recipient’s bank account details, such as the account number and IFSC code.

You only need to know their VPA, which is easy to remember.


UPIs transactions are highly secure as they are authenticated using a UPIs PIN.

This ensures that only the authorized user can initiate the transaction.


UPIs are an interoperable platform, which means that you can use any UPI-enabled mobile app to transfer funds to any bank account that is also linked to UPI.

No Transaction Fees:

Unlike other modes of payment, UPIs do not charge any transaction fees.

This makes it a cost-effective option for transferring money.

UPIs have brought a revolution in the way we transfer money.

Its simplicity, convenience, and security have made it the most preferred mode of payment in India.

With UPI, you can transfer money instantly, without any transaction fees, and without the need to remember bank details.

It has made digital payments accessible to everyone and has helped in achieving the goal of a cashless economy.

Charges On UPI Transaction

Transaction Charges

Most UPIs transaction are free of cost, which means that you do not have to pay any fees to transfer money.

However, there are certain types of UPIs transaction for which you may have to pay transaction charges.

For example, some banks may charge a nominal fee for UPI transactions above a certain limit.

These charges vary from bank to bank, and you should check with your bank to know the exact charges.

Merchant Discount Rate (MDR)

Merchant Discount Rate (MDR) is a fee charged by banks to merchants for accepting digital payments.

It is a percentage of the transaction amount and is usually borne by the merchant.

However, in some cases, the merchant may pass on the MDR to the customer.

This is usually the case when the transaction amount is small.

For example, if you are paying for a cup of coffee using UPI, the merchant may ask you to bear the MDR, which is usually around 0.25% of the transaction amount.

Overdraft Charges

Overdraft charges are applicable when you transfer money using UPI, and your account balance is insufficient to cover the transaction amount.

In such cases, your bank may charge you an overdraft fee, which can be quite high.

It is, therefore, important to ensure that your account has sufficient balance before initiating a UPI transaction.

 Foreign Transaction Charges

If you are using UPI for international transactions, you may have to pay foreign transaction charges.

These charges are usually levied by the bank and vary depending on the currency and the transaction amount.

A logo is an essential part of any brand or service as it serves as a visual representation of the brand identity.

It helps people to identify and recognize a brand easily.

Similarly, in the case of UPI, the logo plays a crucial role in building trust and confidence in the users.

As UPI involves transferring money between bank accounts, people need to be sure that they are using a reliable and secure platform.

A well-designed logo can convey the message of trust and reliability to the users, and thus, it is important to have a logo that reflects the values and principles of UPI.

Let’s take a look at some popular logos used by UPI-enabled apps:

1. Google Pay:

googlepay (Source: Google)

The Google Pay logo is a stylized ‘G‘ with colors blue, green, and yellow.

The logo is simple and easy to recognize, and the use of bright colors adds a friendly and approachable vibe to it.

2. PhonePe:

Phonepe (Source: Phonepe site)

The PhonePe logo features a stylized hand with a violet and white color palette.

The hand symbolizes the ease of making transactions using the PhonePe app, and the green color represents growth, prosperity, and freshness.

3. Paytm:

The Paytm logo is a vibrant shade of blue with a white colored tick in the center.

The color blue signifies trust, security, and stability, while the white tick represents the ease of using Paytm for transactions.

4. BHIM:

The BHIM logo features a blue-colored stylized ‘B’ with the letters “BHIM” written below it.

The color blue represents trust and security, and the use of a single letter ‘B’ in the logo makes it easy to remember.

5. Amazon Pay:

amazon pay

Best UPI App in India

Sr. No.PPI IssuerApp NameHandle NameLinks URL
1ICICI Bank LimitedPockets@pocketsICICI Bank Contact Us - Customer Care, Queries & Feedback - ICICI Bank
2LivQuik Technology (India) Private LimitedJupiter Edge@liv
3IDFC FIRST Bank LimitedFampay, First ₹UPI@idfcbank,@idfcpay
4Amazon Pay (India) Private LimitedAmazon@amazonpay
5Spice Money LimitedBHIM SpicePay@spicepaySpice Money
6Eroute Technologies Private LimitedOmniCard@omniContact Us
7Transerv LimitedDhani@dhaniCustomer Care Policy
8Bajaj Finance LimitedBajaj Finserv@bpaywalletReach Us - For Customer Care, Queries, Feedback - Bajaj Finserv
9Transcorp International LimitedCheq@trans
10Tri O Tech Solutions Private Ltd.Fampay@fam
11Pine Labs Private Ltd.Fave, DreamX@pinelabs

Third Party UPI Apps List

Sr. No.TPAPPSP BanksHandle NameLinks URL
1Amazon PayAxis Bank, Yes Bank, RBL Bank@apl, @yapl, @rapl
2Bajaj FinservAxis Bank@abfspay
3Bajaj MARKETS (Finserv Markets)Axis Bank@abfspay
4CoinTabFederal Bank@fbl
5CREDAxis Bank@axisbHome > Profile > Support > Other Issues > CRED UPI
6Fave (Pinelabs)IDFC FIRST Bank@idfcbank
7GoibiboICICI bank@icici
8Google PayAxis Bank, HDFC Bank, ICICI, SBI@okaxis, @okhdfcbank, @okicici, @oksbi
9GrowwAxis Bank@axisbankHome > Profile > Help & Support > Payments > Groww UPI
10Jupiter MoneyAxis Bank Limited@jupiteraxis
11Make My TripICICI, IndusInd Bank@icici, @indus
12MobiKwikHDFC Bank@ikwik
13PhonepeYes Bank, ICICI Bank, Axis Bank@ybl, @ibl, @axl
14Samsung PayAxis Bank@pingpay
15SlashICICI Bank@icici
16sliceAxis Bank@sliceaxis
17SuperPay (Chintamoney)Kotak Mahindra Bank@kmbl
18TataNeuICICI Bank@tapiciciHomepage > Top right corner Menu button > Legal > Terms & Conditions
19TimepayThe Cosmos Co-Operative Bank Ltd.@timecosmos

People Also Ask

What is UPI?

UPI stands for Unified Payments Interface.

It is a digital payment system developed by the National Payments Corporation of India (NPCI) to facilitate easy and instant money transfers between bank accounts.

How does UPI work?

UPI allows users to link their bank accounts to a mobile number and make transactions by using a virtual payment address (VPA).

The VPA acts as an identifier and eliminates the need to share bank account details.

Transactions can be initiated by using a mobile app that supports UPI.

Is UPI safe?

Yes, UPI is considered safe and secure.

Transactions made through UPI are encrypted and protected by multi-factor authentication.

Additionally, UPI transactions are covered by the RBI’s Payment and Settlement Systems Act, 2007.

Can I transfer money internationally using UPI?

No, UPI can only be used for domestic transactions within India. It does not support international money transfers.

Is there a limit on the amount that can be transferred using UPI?

Yes, there is a limit on the amount that can be transferred using UPI.

The maximum limit per transaction is Rs. 1 lakh.

However, some banks may have their own transaction limits, and users should check with their bank for more information.

Are there any charges for using UPI?

Most banks do not charge any fees for using UPI.

However, there may be charges for certain types of transactions or if the transaction limit is exceeded.

Can I use UPI without a smartphone?

No, UPI requires a smartphone and an internet connection to make transactions. However, some banks may offer alternative methods to make UPI transactions, such as through SMS or USSD.

How long does it take for a UPI transaction to be processed?

UPI transactions are usually processed instantly, and the amount is transferred to the recipient’s account within a few seconds.

However, in some cases, it may take up to a few hours for the transaction to be completed.

What happens if a UPI transaction fails?

If a UPI transaction fails, the amount will be refunded back to the user’s account within a few days.

Users can also contact their bank’s customer support for further assistance.

Can I use UPI to pay bills?

Yes, UPI can be used to pay bills, including utility bills, mobile recharge, and DTH recharge. Many service providers have integrated UPI as a payment option, and users can make payments by using their UPI ID or QR code.

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