The National Pension System (NPS) has started allowing payments via the Unified Payments Interface (UPI). However, only payments up to ₹2,000 can be made in a single transaction if you contribute online through NSDL (eNPS).
Customers onboarded by intermediaries (points of presence or PoPs such as banks that facilitate UPI payments) have to pay a minimum transaction charge of ₹10 on ₹2,000. This amounts to a significant 0.5% of the contribution. This is much higher than the 0.1% levied for larger contributions made through net banking in which the minimum charge does not kick in.
How to contribute
You can contribute online through NSDL (enps.nsdl.com) or Karvy (enps.karvy.com). Some pension funds have also created links from their own websites to NSDL and Karvy. Go to either website and enter your Permanent Retirement Account Number (PRAN). An OTP will be sent to your phone number and email address. Next, select payment gateway SBI ePay and UPI as the payment option. A request will be sent to your UPI app—Google Pay, BHIM, PhonePe, Mobikwik or others. Approve the request by entering two PINs—the first for opening the UPI app and the second MPin for authorizing the payment.
However, be alert about the problem of failed transactions, which this Mint reporter faced. This may be reconciled eventually by NSDL or Karvy. If it’s not done, lodge a complaint online.
If you’ve signed up for NPS through a PoP such as your bank, you’ll pay 0.25% of every contribution. For example, on ₹50,000, you will be paying a charge of ₹125. If you contribute online through net banking, this percentage will fall to 0.1% or ₹50 in the above example. However, there is a minimum limit of ₹10 on PoP charges. This paradoxically increases the charges for UPI payments as the limit is just ₹2,000. As a result, the minimum PoP charge of ₹10 kicks in on every contribution rather than the percentage limit of 0.1% (which would be ₹2). This takes up the charge to a significant 0.5% of your contribution. There is an additional GST of 18% as well, pushing up the charge to ₹11.8.
Note that if you open your NPS account directly through a Central Recordkeeping Agency (NSDL or Karvy), the PoP charge won’t apply.
Introduction of UPI is a welcome step in NPS. However, the tiny size of the contribution allowed makes the PoP charge higher. The limit of ₹2,000 (which also applies through payments via debit cards) should be revised at the earliest. You should also be careful of payment failures. For now, avoid UPI for NPS payments, if you are comfortable with net banking.