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Fees For Accepting Payment Through Credit Card UPI

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VR_Rahman
You can now let customers scan your Google Pay QR and pay you via RuPay credit cards. Please visit https://payforbusiness.app.goo.gl/rupay on your mobile phone to update your Google Pay for Business app and complete the setup by 8th September, 2023.

We have updated our Terms of Service to reflect RuPay credit card acceptance.
Thank you,
The Google Pay for Business team

When I tried to update the settings on the Google Pay for Business app, it said "Extra charges may be deducted from the settlement amount"

Will the merchants will be charged if we pay or receive payment via Rupay Credit?


@abhishek012 Want to know your views about this or if you have any updated information please let us know.


Screenshot2023-09-02at8.52.03PM


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Top Comments
Benevolent Benevolent
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But the sun will reach the end of its life in 10 billion years. Most probably life on earth will end at that time :>
Deal Captain Deal Captain
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@romilq But UPI won't end, it will be sent to another galaxy. Already being implemented in other countries, and the row of rocket launches is an attempt to propagate it to other galaxies wink
Like Magnet Like Magnet
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Got your point and I agree on that. But my genuine question will be:

For an example, I'm visiting a small electronic store to buy a fan. The fan costs around 4k. If I want to pay the amount via credit card, the shopkeeper will force me to pay additional 2-3% but in case of UPI, he'll receive the amount with a big smile. Let's assume the merchant activated his account to receive payment via credit card UPI. Now he has to pay a minimum of transaction fee for receiving payment via CC UPI. I paid him 4k via CC UPI. How will he know in advance that his money is going to be deducted  so that he can force me to pay some extra amount as I am paying via CC UPI.

If this happens then I don't think any small merchant is going to receive payment via CC UPI.

Finance Ninja Finance Ninja
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@VR_Rahman Merchant have an option to enabled or disabled RuPay CC link UPI payment from his/her merchant app.

Today, i said this thing in to someone -

If you sell something more than 2k then 99% chance you will earn enough profit to pay upto 2% MDR.

Merchants need to understand, If any merchant accept digital payments, merchant's profit will be decrease due to upto 2% MDR but merchant will get more customers, which will increase merchant's profit in the long run.

Of course MDR charges should be at a reasonable price and here merchant already get zero MDR for transaction under 2k.

In today's India, if digital payment is not accepted then it is the merchant's own loss and the merchant who will give more and more payment options to his customers will make more profit in the long run.

And I say again that everything should be balanced, So the merchant and customer both will get the benefit.
Benevolent Benevolent
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Bs ab fir tata bye khtam bol do rupay cc ko..
Benevolent Benevolent
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+1

For the Indian market, no merchant is willing to pay the 2% MDR from their own profit. Either they will charge 2% additional from the customer or won't take the CC upi payment.


Also, this is only a myth that if the merchant pays 2% from their own pocket in the hope of getting business, their business will increase ( @abhishek012  ). But in reality, this is not the case, VISA and Mastercard have been trying to sell this illusion for a long time, but Indian customer/merchant is not easy to be fooled.

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Finance Ninja Finance Ninja
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What's new ? already annouced last year, trial period is now over.

Now small merchants accept payment upto Rs2000 is Free from RuPay credit card link UPI,

Accept payment above Rs2000 - 1.25% to 2% MDR charges applicable, depend on your merchant category.

Note - RuPay credit card link UPI is 100% free for customers and no extra charges for next 1 trillion years but bank will charge you for fuel surcharge, rent payment etc, depend on your credit card issuer bank's t&c.

Like Magnet Like Magnet
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Got your point and I agree on that. But my genuine question will be:

For an example, I'm visiting a small electronic store to buy a fan. The fan costs around 4k. If I want to pay the amount via credit card, the shopkeeper will force me to pay additional 2-3% but in case of UPI, he'll receive the amount with a big smile. Let's assume the merchant activated his account to receive payment via credit card UPI. Now he has to pay a minimum of transaction fee for receiving payment via CC UPI. I paid him 4k via CC UPI. How will he know in advance that his money is going to be deducted  so that he can force me to pay some extra amount as I am paying via CC UPI.

If this happens then I don't think any small merchant is going to receive payment via CC UPI.

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Deal Cadet Deal Cadet
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Using Internet Explorer?

Like Magnet Like Magnet
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Today only I received the mail from Gpay Business.

Generous Generous
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@Abhishek012

I had activated GPay for Business and was transacting around 20-30k every month thru my HDFC Rupay card but it suddenly stopped working since last week of August; Had done last transaction of 4k on 14th August but now it is not going thru with error ' Couldn't allow this Payment, You can't use your card for this payment'

Any idea on how to activate CC payment since UPI thru Bank is going thru. It is a Business account (but linked to my personal Bank) with transaction of around 20-30k per month from various customers.

Finance Ninja Finance Ninja
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Wait few weeks and update to latest version merchant app.

I think you will soon get an option to enabled or disabled RuPay CC link UPI payment accept.
Benevolent Benevolent
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Bs ab fir tata bye khtam bol do rupay cc ko..
Benevolent Benevolent
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+1

For the Indian market, no merchant is willing to pay the 2% MDR from their own profit. Either they will charge 2% additional from the customer or won't take the CC upi payment.


Also, this is only a myth that if the merchant pays 2% from their own pocket in the hope of getting business, their business will increase ( @abhishek012  ). But in reality, this is not the case, VISA and Mastercard have been trying to sell this illusion for a long time, but Indian customer/merchant is not easy to be fooled.

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Cool Cool
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I can see the same settings in paytm and phonepe merchant apps which shows these charges clearly mentioned.

Just to clarify @abhishek012 if every time the customer pays 1999 rs per txn then there should be no mdr right? Or it on the total amount of payments received per month?

Finance Ninja Finance Ninja
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For customers - RuPay CC link UPI upto 1 lakh per transaction is free.

For merchants - accept payments till Rs2000 (not Rs1999) per transaction is free. no MDR.
Deal Cadet Deal Cadet
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Old news.

Benevolent Benevolent
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@abhishek012

the big players have a lot of money to burn but other players in the market won't do the same.

Currently, the same MDR is charged by VISA & MasterCard but if you go to any nearby jewelry store and ask to pay by credit card they charge that fee from you (this is the case near me)

Once the charges are applicable on the rupay cc upi, I think it will become the same as VISA & MasterCard for the majority of big payments. Of course, there will be exceptions for big players like amazon, Flipkart, and soon but they are also not charging for VISA & Mastercard, so there is no such difference, just you will get the facility to pay via upi there, nothing else. 

But since small payments <2k are free, people may pay using multiple payments. This is beneficial.

Generous Generous
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Hamare jaise logo ke liye kya scheme hai.. na business karna hai na purchase karna hai.. bas rwd earn karna hai 🤔

Generous Generous
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Anyway.. 2% me kya hi hota hai agar sab genuine hai to.. Saman ka rate 2000 ki jagah 2040 ho jayega.. waise bhi hame kya oata kaun sa smana ka kitna genuine rate hota hai.. 20 bole waha bhi thik 24 bole wo bhi sahi..

20 me bhi 2 rs wargain larmege .. 24 me bhi 2 rs wargain..

Ab product ka koi spl list to nahi ki hame pata ho.. ye wala 20 ka aata hai to 22 kyo de raha.. 🤷

Generous Generous
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Bas dimag me hai.. business man ke.. 20% profit lena hai to 18 kyo le.. 22 % kar lo bhai.. technically customer will pay..ham to 200 ke bhi timatar kha chuke kya hi fark padega 20 ka 22 ho jaye to. 🤷🤦‍♂️

Generous Generous
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Bas ab dm me spl trick send kar do koi. Rupay cc 4 5 ho gaye ab inka kya kare ... I am neither businessman.. nor sad customer..  xd

Flame Flame
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I echo the sentiment that, currently, merchants are reluctant to bear the extra 2 to 3% MDR. However, looking ahead, they might have to adapt. Businesses within the UPI ecosystem find the merchant and payment gateway providers very enticing. Despite the current hesitancy to pay the extra 2% MDR, they might resort to forcing customers to pay in cash to avoid those fees upfront.

What sets UPI apart is its Indian origin, tailored for the Indian market. Unlike Visa and MasterCard, which are foreign entities, UPI is a homegrown product. The creators, well-versed in the Indian market, are unlikely to halt its progress just because merchants resist paying fees.

In the case of cards, you need to carry them separately in your wallet. However, with UPI, all you need is your phone. Everyone may forget their slippers, but hardly anyone forgets their phone; it's always with you, making UPI incredibly convenient.

Visa and MasterCard often overlooked small businesses, such as paan shops or fast-food sellers. UPI, in contrast, reached every nook and corner. While Visa and MasterCard limited themselves to cities, UPI penetrated even the smallest villages. It's everywhere, known to every individual, and is much more convenient than Visa or MasterCard.

Over the past 4 to 5 years, banks, mostly the sellers of POS machines, approached my business only twice. UPI QR makers, like Paytm Lite, Paytm, Amazon Pay, etc., have been remarkably aggressive. This suggests a high likelihood that UPI's merchant payment acceptance will witness a significant increase.

Notably, three to four years ago, many were hesitant to accept digital payments, fearing the involvement of third parties or potential taxation issues. The UPI ecosystem, however, compelled them to start accepting digital payments to avoid losing customers.

In my area, there's a significant shop that still doesn't accept UPI payments. However, as soon as you leave the shop, the shopkeeper calls you back, takes out his phone, and shows his personal UPI QR code for payment. This illustrates the power of the UPI ecosystem.

Comparing this to Visa or MasterCard, where people generally keep cards in their wallets along with some cash, UPI stands out. It doesn't require any physical wallet; your phone is enough. Particularly among the youth, many don't carry wallets all the time, especially in local areas where cash isn't a necessity.

While Visa and MasterCard may not approach small businesses, UPI's approach is free to be more extensive in India. One more crucial point is that, ultimately, it's the customer who will bear the extra charge. Businesses seldom accept losses, and what matters to a customer is not paying extra.

Considering the booming credit card industry in India, everyone may soon have a credit card. As dependence on credit cards increases, prices may rise. Even those paying with cash may have to bear a hidden MDR to the merchant. Customers may not be pleased, but globally, credit card usage has led to price hikes.

In the next 3 to 5 years, every single merchant, whether they like it or not, may be forced to accept payments through UPI or credit cards. Visa and MasterCard were never able to achieve this because they were not as aggressive. Additionally, the UPI government-backed system is more suitable for India.

RBI's initiative to reduce the circulation of physical cash is noteworthy. The news about RBI saving money on printing fewer notes indicates the gradual shift towards digital transactions. MasterCard's acknowledgment that surviving in India's UPI market is challenging adds another layer. In the coming years, allowing users to link their Visa and Master credit cards on the UPI network will limit merchants' options in India's market.

To make people addicted, so to speak, to UPI, it's vital to understand that people will be left with no other option but to accept it. In the future, payment gateway providers may incentivize businesses with front cash backs for all the charges they incur. However, after a few years, these cash backs might be removed, and businesses will have to bear the fees.

For instance, PhonePe or Paytm charges one percent or 2% of 2 rupees for recharges, and many people still use it. While some may be hesitant, the majority tends to dominate the market. In conclusion, UPI is far more convenient than MasterCard and Visa.

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