RTGS, NEFT Is Free Effective July 1st; But Paytm Transactions Will Now Become Costly

Effective July 1st, RTGS, and NEFT will be free, as RBI will not charge anything for these two modes of fund transfer.

But, will the banks pass on the benefits to the end-users?

Meanwhile, after reports emerged that Paytm will charge extra fees related with MDR from the users, there was some chaos. But Paytm has clarified that there will be no extra fees.

However, the truth is slightly different.

Check out the details right here!

RTGS, NEFT Free From Today

As per the promise made by RBI, both NEFT and RTGS has been made free, as RBI will not charge anything from the banks.

While RTGS is used for money transfer above Rs 2 lakh, in real time, NEFT is used for online money transfer, below Rs 2 lakh. 

SBI, which is India’s largest bank, charges between Rs 1 to Rs 5 for NEFT (depending on the amount being transferred), whereas between Rs 5 and Rs 50 for RTGS transfers.

Now, since RBI will not charge any service fee for the RTGS and NEFT, banks have been asked by RBI to pass on the benefits to the end-users.

Indian Banks’ Association Chairman Sunil Mehta has welcomed this move.

Paytm Transactions Will Become Costly

Since last 24 hours, various reports came in that Paytm will now charge a service fee for every money transfer and wallet payments on their app.

Paytm has strongly refuted these claims, and have said that there will be no additional fees for the same.

In a blog post, Paytm said they “neither charges nor will charge any convenience or transaction fee!”

However, the truth is slightly different.

Yes, Paytm will not charge anything extra from the customers for using their wallet for payments and money transfer, but henceforth, Paytm will pass on the MDR charged by the banks to the customers.

But Paytm Is Not Adding Any New Charge!

Earlier, this MDR was absorbed by Paytm, and the customer was not asked to pay for the same.

MDR or Merchant Discount Rate is the fees that banks charge for using their debit/credit cards from the merchants. It is 1% for using credit cards, and 0.9% for debit cards upto Rs 12-15 for transactions done by net banking.

Paytm has defended this, by saying that they are merely transferring the MDR charged by the banks to the end-users. There are no additional fees being added here.

A spokesperson said, “In case there is any fee being charged, then it is in fact the MDR being passed on by the merchant to the customer. Paytm does not (itself) charge any convenience fee or MDR from the consumers and has no plans to levy the same in the future.” 

However, in an interesting take on the credit cards, Paytm said that some educational institutes or utility service providers’ does charge extra fees on using credit card payments. In order to avoid this extra charge, Paytm suggested, that the users should either use debit cards or UPI mode of payment.

We will keep you updated, as we receive more updates. 

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