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SBI to charge fees on wallet-to-account transfers for its Buddy Wallet


State Bank of India (SBI) is levying a fee on customers using their Buddy wallet to make transfers to bank accounts. According to this circular, SBI will charge users 3% service charge plus service tax for wallet-to-account transactions using IMPS, starting June 1st, 2016.

Charges for NEFT and RTGS transactions too

NEFT transactions were also updated:

  • Rs 2 for transfers below Rs 10,000.
  • Rs 4 for for transfers above Rs 10,000 and below Rs 1 lakh
  • Rs 12 for transfers between Rs 1 lakh and Rs 2 lakh
  • Rs 20 for transfers above Rs 2 lakh

RTGS transactions fees will be:

  • Rs 25 from Rs 2 lakh to Rs 5 lakh
  • Rs 45 for transactions above Rs 5 lakh

Note, on NEFT and RTGS transactions, service charge will be extra.

Cost of transaction was always there

There was always a cost associated with wallet-to-account transactions, but most bank wallets (Pockets by ICICI Bank and Lime by Axis Bank) absorb these costs and do not charge customers. Union Bank of India’s DigiPurse wallet has this to say in its terms and conditions:

At present, Bank does not charge any fee for offering this DigiPurse Facility. Bank reserves the right to charge the Customer fee for the use of the services provided under the facility and change the fee structure at its discretion. Display of such charges on Bank’s website would serve as sufficient notice and the same is binding on the customer.

In terms of wallets, Paytm, passes on the charges to customers in the case of wallet-to-account transactions. The company charges 4% for customers who have not completed their KYC and 1% for KYC compliant customers.

MediaNama’s take

This move by SBI will hinder the adoption and interoperabitliy in digital payments. Note, that this isn’t the first time that SBI has hindered wallet transactions. In November last year, SBI stopped its customers from transferring money into the Paytm wallet and Oxigen wallet users aren’t allowed to load money via payment gateways owned by SBI.

It is strange that SBI will charge customers to transfer money to bank accounts while it does not when loading money into wallets from bank accounts… or for that matter, when putting cash into your bank account. A wallet is just another account: shouldn’t there be charges associated with that too?

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© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ