However, this will be between payment entities and NPCI. How the benefits get passed on to consumers will depend on market strategies of various companies.
“In this market, where the major players are super-funded, benefits will get passed on to consumers very easily,”
said Vivek Belgavi, fintech leader at consultancy firm PwC India. “The move will remove further barriers for the overall ecosystem to grow.”
Google Pay has been aggressively promoting UPI scratch cards and offers exclusive cashbacks for specific merchants such as Uber or Licious among others. Both Paytm and PhonePe have featured offers and incentives to get ahead in the retail payments race. PhonePe said recently that it intends to spend ₹500 crore in the next year to promote UPI payments through its application.
“For banks critical to the UPI ecosystem, what needs to be found out is are we creating enough revenue opportunities for them,” said Belgavi, sounding a note of caution.
Overall, UPI has been on an upward trajectory, clocking close to 800 million transactions in March with ₹1.3 lakh crore being settled through the platform, as per the latest NPCI data.
UPI is predominantly a person to person (P2P) payment mechanism as of now with less than 15% accounted for by merchant payments.
“There are more than 100 million UPI handles that have been created but the number of unique users of UPI will be in the range of 70 million,” said the person cited above.
Private sector Kotak Mahindra Bank recently became the first lender to inform its customers that UPI transactions of more than 30 in a month will incur charges. For transactions up to ₹1,000, the cost will be ₹2.5 per transaction and ₹5 for those above ₹1,000, the bank said.