UPI interchange, PSP charges end; PhonePe, Google Pay, hit

On every UPI P2M transaction, these third-party applications had been earning an average of 30–35 p as PSP fee; that income will stop now

The National Payments Corporation of India (NPCI) on Friday said it had agreed to abolish the UPI interchange and payment service provider fees for all domestic UPI merchant (P2M) transactions. Companies like Google Pay and PhonePe are likely to suffer losses due to this decision.

According to the circular of the NPCI, this change in fee will come into effect from 1 January. These charges have been withdrawn for the interim period up to 30 April. This will not apply to Mandates, EMIs, Overdraft Accounts and B2B collections and payments.

The decision aims at abolishing the charges after the abolition of the Merchant Discount Rate (MDR).

Since banks could not charge any MDR from merchants for RuPay debit cards and UPI transactions, it was already expected that they could also be exempted from paying fees to other parties.

The move may affect the earnings of digital payments companies like PhonePe, Google Pay and Amazon Pay. These companies have invested a lot of money in the UPI ecosystem to grab a bigger market.

It is also not clear how the charges already accepted will be refunded, as the decision to abolish the UPI interchange and PSP charges for domestic UPI merchant comes into effect retrospectively from 1 January.

With the elimination of these charges, third-party apps (TPA) like Google Pay, PhonePe, Amazon Pay, etc are left with no scope for earning anything on UPI transactions. On every UPI P2M transaction, these TPAs ​​earn an average of 30–35 p as PSP fee. It’s to be seen what other sources of earning will be available to them to stay in business.

Sirf News had reported in June 2019 that WhatsApp was setting up its data storage facilities in India and preparing for the full launch of its UPI payments app in association with ICICI Bank. A year before that, Facebook-owned WhatsApp had already joined Truecaller and Google in the league of multinational corporations that entered the fast-growing UPI ecosystem to corner a share of India’s digital payments market.

Other private companies today’s decision will affect are as follows.

Serial numberTPAP/Merchant NamePSP/Acquiring bank  Handle name
1Samsung PayAxis Bank@pingpay
2Uber IndiaAxis Bank@axisbank
3Amazon PayAxis Bank@apl
4CredAxis Bank@axisb
5Bajaj Finserv Direct LtdAxis Bank@abfspay
6CoinTabFederal Bank@fbl
7JustDialHDFC Bank@hdfcbankjd
8MobikwikHDFC Bank@ikwik
9PayBeeIDFC Bank@idfcbank
10UltracashIDFC Bank@idfcbank
11FastAgIndusInd Bank@indus
12Angel BrokingYes Bank@yesbank
13Strucred (Kreon)Yes Bank@yesbank
14Reflex(Kaha Technologies)Yes Bank@yesbank
15Make My TripYes Bank@ybl
16CleartripYes Bank@ybl
17AirtelYes Bank@ybl
18SwiggyYes Bank@ybl
19RedbusYes Bank@ybl
20FlipkartYes Bank@ybl
21JabongYes Bank@ybl
22MyntraYes Bank@ybl
23PVRYes Bank@ybl
24HungerboxYes Bank@ybl
25PhonepeYes Bank@ybl
26Microsoft kaizalaYes Bank@yesbank
27MudraPayYes Bank@yesbank
28UdaanYes Bank@yesbank
29Expense on DemandYes Bank@yesbank
30Angel BeeYes Bank@yesbank
31OmegaonYes Bank@yesbank
32ShareiTYes Bank@yesbank
33Google PayAxis Bank @okaxis
HDFC Bank @okhdfcbank
State Bank of India @oksbi
Bank of Baroda@barodapay
35# WhatsAppICICI Bank@icicibank
36MI PayICICI Bank@myicici
37Make My TripICICI Bank@icici
38KhalijebKotak Mahindra Bank@kmbl
Sirf News Network

By Sirf News Network


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