Now, a fee on UPI Google Pay payments!

Google Pay in India is considering introducing transaction fees for UPI payments, along with GST charges ranging from 0.5% to 1%. This move comes as the increasing popularity of digital payments through UPI platforms like Paytm, PhonePe, and Google Pay is changing the landscape of financial transactions in the country. The shift to digital payments is also supported by government initiatives like Jan Dhan Yojana, bringing banking services closer to the masses.

Finance Feb 22, 2025 111 Add to Reading List

The UPI payment system in India has now reached even the remotest villages of the country. This growth happened after Prime Minister Modi's demonetization process, which made payment apps more accessible to the general public. Currently, the UPI payment system in India allows users to make transactions without any additional charges, leading to a decrease in the physical usage of cash. The opening of zero-balance bank accounts under the Jan Dhan Yojana further contributed to the digital payment system becoming more accessible to the public. As a result, apps like Paytm, Google Pay, PhonePe, NaviPe, and Cred have become increasingly popular. The lack of additional transaction fees has made these apps widely used.

Now, it seems that the US tech giant, Google, is considering charging transaction fees for payments made through Google Pay in India. As part of this move, Google Pay has already started collecting convenience fees for bill payments made using credit and debit cards. Many users are shocked by this development. Google has also decided to levy GST on the transaction fee, ranging from 0.5% to 1% of the transaction value. With the increasing use of UPI payments in the country, the tech giant seems to be considering monetizing UPI transactions to cover processing costs.

It’s already known that other major digital payment apps, like PhonePe, charge processing fees for utility payments such as water bills, electricity bills, internet bills, school fees, DTH recharges, and mobile phone recharges. Several digital payment platforms in the market are already offering attractive cashback offers on credit card bill payments. The successful UPI payment system in India has gained global recognition, and it is widely used by both small street vendors and shopping malls across the country. While India leads in digital payments, countries like Brazil, China, Thailand, and South Korea follow closely behind.

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