Top 3 Myths busted about UPI Payments, Tax and Bank Accounts for Hylobiz customers

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In an internal meeting, our sales team were sharing the feedback and requests from the client, just then one of the senior sales person phone rang. It was one of our esteemed customer — Why am I being charged for UPI transactions? The person on the other side said in such a loud voice that everyone in the meeting room could hear that.

Our skilled sales team then explained him — How the charges work for any transactions, and for us it was time to break the myths for our customers!

Myth # 1 — UPI Transactions are not chargeable

Quick answer — Partially True

Long Answer — NPCI in November 2020 reached 2Bn transactions a month. With such a huge growth, NPCI was keen to protect the UPI ecosystem as it would further scale up, hence proposed a cap of 30% of total volume of transaction processed in UPI that is applicable to all third party app providers [ TPAPs].

This news led to a rumour that UPI transactions are chargeable , which later NPCI denied that there are no charges applicable from NPCI.

But now the Banks where the customer is and using/making UPI based transaction are the ones that have put in charges, but hold on not all transactions are chargeable by Banks.

The table below denotes the different types of transaction that happen via UPI.

Merchant Transaction

Bill Payment Transaction

Peer to Peer Transaction/Person to Person Transaction/P2P transaction

The transaction where a person pays to the merchant while shopping comes under this

The transactions made to pay electricity bill, phone bill, recharge your mobile fall under these transaction

These are transaction
made from one person/business to another person/merchant.

No Charges by NCI or Bank

No Charges by NPCI or Bank

This is where charges get applicable by Banks. While some banks start charging after ’n’ number, others start with 1 sttransaction.

Hylobiz, that offers cashflow automation has tied up with banks in India and based on the charges applied [ which Hylobiz negotiated to offer best price to its customers] are the ones that are based on the bank you use to make a UPI transaction.

So, yes UPI transaction are chargeable and not chargeable, but it would depend on the bank you use. If some firm approach you stating “UPI charges are zero for P2P transactions” either they are paying from their pockets or it is a scam.

If you still have doubts on the charges , would be happy to discuss with you. Please contact us here.

Myth # 2 — Using Digital platform like hylobiz would mean coming under tax radar?

Quick Answer — No

Long Answer — Using a digital platform does not mean Tax authority would raid you/your business. In a way it’s an assurance to the authority that whatever you are doing is legal and have been your hard earned money.

Digital platform allows you to keep your books organized with taxes, liabilities and credit structured. As a business owner, it gives you an added advantage in situation where if an audit is requested by Tax authority, you do not need to dig files and folders to offer a convincing answer. All your accounts, ledgers and tax details are seen in white.

Myth # 3 — Banks advise never to share banking details with anyone, so I should not allow Hylobiz platform to update my bank account details.

Quick Answer — Hylobiz platform never asks for your password, OTP, credentials.

Long Answer — As a business owner if you have asked for payment from your supplier, and he insists to pay online. How do you make the payment? You would need to have the bank account details i.e.

  • Account Holder Name
  • Bank Account Number
  • IIFSC Code
  • Current/Savings Account

With these details, any of your business partner can pay you.

And these are the details asked by Hylobiz to be put in for your account [ that you have control of and can remove anytime] for timely payment of your invoices. Hylobiz would never ask for OTP, password or credentials to access your account.

Once you have put in the banking details like name, number and IIFSC code, the invoice payment would directly get paid to your account.

Hylobiz is a Digital-first platform for all your Offline and Online Payments

Hylobiz is a platform that offers business owners, accountant ,sales and marketing teams a way to get paid on time. Loaded with features of seamless integration to ERP’s and Banks, it could boost your business in streamlining payments and recognizing revenues.

Hylobiz automates manual processes, lowers transaction costs, and speeds up invoice collection.

Here are some of the features Hylobiz offers -

Invoice Collection — Hylobiz Receivables help you digitizing your collection process. You get the power to send your invoices or pro forma to your customers with a secured payment links giving multiple payment methods to your customers to make digital payments

ERP Integration — Access your ERP with our pre-integrated ERP list with Hylobiz or just upload your invoice file to kick start your digital collections with a simple two-step process

Automated Reconciliation — Hylobiz helps you with automated reconciliations of your banking transactions. All your receivables and payables are consolidated and updated in a single report with a Unique Payment Identity Number.

Credit Card, loans and Insurance — Get Business Credit Card, loans and health or inventory insurance. You can also extend these benefits to your customer who pay on time.

If you want to know if Hylobiz and your company can be a perfect match, schedule a free demo today.

Originally published at



SME NeoBanking products — Payments receivables, Payables, and Credit scoring for SMEs.

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Hylo Biz

SME NeoBanking products — Payments receivables, Payables, and Credit scoring for SMEs.