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Sunday, July 22, 2018

Reduce digital fund transfer charges: Govt to public sector banks

The USSD fee is Rs 1.50, which has been waived till December 30, 2016.

By: ENS Economic Bureau | New Delhi | Published: December 22, 2016 4:27:47 am

The finance ministry on Wednesday asked state-owned banks to reduce fees on payments made through Immediate Payment Service (IMPS) and Unified Payments Interface (UPI). Transaction fee on these payment modes should be restricted to the extent that is applicable for NEFT fund transfer of over Rs 1,000, the ministry told the banks.

As per RBI norms, NEFT transfers of up to Rs 10,000 attract Rs 2.5 fee. From Rs 10,000-1 lakh the fee is Rs 5; on Rs 1-2 lakh it is Rs 15, and beyond Rs 2 lakh it is Rs 25. Service tax is charged in addition to this. For Unstructured Supplementary Service Data (USSD) transactions above Rs 1,000, the ministry said a further discount of 50 paise on these rates shall apply. USSD is mobile short code message and used mainly for banking services on feature phone. The USSD fee is Rs 1.50, which has been waived till December 30, 2016.

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In order to further promote digital and card payments, the government has issued a direction in public interest to all public sector banks, finance ministry said in a statement. IMPS is an interbank electronic instant mobile money transfer service through mobile phones. The UPI app enables customers to make online as well as offline payment to merchants from their bank accounts, without typing card or net banking/wallet details and IFSC code.

This direction will apply for all transactions up to March 31, 2017. “For USSD transactions above Rs 1,000, a further discount of fifty paise on these rates shall apply,” the ministry said. To promote digital transaction, Niti Aayog has announced two schemes – Lucky Grahak Yojana and Digi Dhan Vyapar Yojana’, to be launched on December 25. The schemes will cover small transactions between Rs 50 and Rs 3,000.

Transactions using RuPay, USSD, UPI and Aadhaar Enabled Payment System (AEPS) will be covered under this scheme; payments made through credit cards and e-wallets would not be covered.

On December 8, the Centre announced a bevy of measures to boost digital transactions, including a waiver of service tax on digital payments amounting to less than Rs 2,000, discounts on petrol and diesel purchases, suburban railway tickets and insurance policies bought from state owned insurance companies through electronic means. The government said it will provide 2 lakh Point of Sales (POS) terminals to villages free of cost, while it capped the monthly rental for such devices at Rs 100 per machine.

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