You are using an older browser version. Please use a supported version for the best MSN experience.

The costs of using digital payment products

LiveMint logoLiveMint 26-03-2017 Vivina Vishwanathan

Post-demonetization, one way or the other, most of us have used some form of an electronic payment system. The Reserve Bank of India has identified 10 major electronic payments options— National Electronic Funds Transfer (NEFT), Real Time Gross Settlement (RTGS), Immediate Payment Service (IMPS), Cheque Truncation System (CTS), National Automated Clearing House (NACH), Unified Payments Interface (UPI), Unstructured Supplementary Service Data (USSD), debit and credit cards, Prepaid Payment Instruments (PPI) and mobile banking.

As of now, banks and PPIs are not charging a fee for using USSD and IMPS platforms till 31 March, up to a certain amount.

Here is a look at all the costs that you might incur while you are using these electronic modes of payment.

Cards: When you swipe a debit card or a credit card at a point of sales (PoS) terminal, you may assume that it is free of cost. However, there are costs of onboarding, such as the annual and joining fees, which you pay for holding these cards. Joining fee is a one-time cost which can be upwards of Rs250. Annual fees can range between Rs200 and Rs25,000. The joining fee and annual fee are usually lower for debit cards and higher for credit cards. Debit cards also double up as ATM cards. Therefore, if you cross your minimum free transactions allowed, you could be charged Rs15-20 per transaction.

Every time you swipe your card, while it may cost you nothing, your merchant pays a charge to the issuing bank, the acquiring bank as well as to the payment network provider such as Visa, Mastercard or Rupay. In some cases, this may get passed on to you.

Fund transfers: You can transfer funds using net banking or mobile banking. There is no cost to log on to your account but when you do a transaction, you pay Rs2.5-25 for every NEFT transaction, Rs30-55 for every RTGS transaction and Rs5-15 for every IMPS transaction. In case you use UPI on your mobile banking app, currently it is free of cost. However, eventually you will have to pay a charge for it as well. Though the app is free, you have to bear the cost of the data used for downloading it to your phone, however minuscule that may be.

These charges can vary and some banks may even waive them for some of the transaction to increase usage.

USSD and UPI: Did you know you can do e-payments without an app or a smartphone, over any mobile phone, using the National Unified USSD Platform (NUUP). It allows you to do basic banking transactions, such as sending and receiving money, checking account balance and getting a mini statement. To use this service, register your mobile number with the bank for this service. To use UPI, you need to have a phone, a bank account, internet connection and a registered mobile number with the bank. Since UPI runs on the IMPS platform, the transactions happen instantly. Currently there are no charges to make transactions. But eventually you may be charged for these transaction.

More From LiveMint

image beaconimage beaconimage beacon