UPI Merchant: National Payments Corporation of India (NPCI) advised that Prepaid Payment Instruments (PPI) fees be applied to merchant transactions on the Unified Payments Interface (UPI) beginning April 1.
The NCPI, the governing body of UPI, stated in the circular that using PPIs on UPI for amounts greater than Rs 2,000 will result in an interchange at 1.1 percent of the transaction value.
Beginning April 1, any UPI transaction worth more than Rs 2,000 made through prepaid payment instruments (PPIs) such as online wallets or pre-loaded gift cards, among others, will incur an interchange fee.
The interchange fee is commonly associated with credit card payments and is levied to cover the costs of accepting, processing, and authorizing transactions.
Also Read: Medicine price hike by 12%, more expensive from April
According to the NPCI, the governing body of UPI, “using PPIs on UPI will result in interchange at 1.1 percent of the transaction value for amounts over Rs 2,000.”
Customers should keep in mind that the interchange fee is generally associated with card payments and is levied to cover the costs of transaction acceptance, processing, and authorization.
Watch | Interchange fee to be levied on UPI transactions made via wallets or cards. The fee will be charged from April 1. pic.twitter.com/Jn57cAvCxp
— NDTV (@ndtv) March 28, 2023
UPI Merchant Transaction:
Customers should keep in mind that the interchange fee is generally associated with card payments and is levied to cover the costs of transaction acceptance, processing, and authorization.
Transactions between a bank account and a PPI wallet do not require an interchange fee, and the PPI issuer will pay the remitter bank approximately 15 basis points as a wallet-loading service charge.
The introduction of interchange is in the range of 0.5-1.1 percent, with fuel accounting for 0.5 percent, telecom, utilities/post office, education, agriculture accounting for 0.7%, supermarket accounting for 0.9%, and mutual funds, government, insurance, and railways accounting for 1%.
NPCI will evaluate the stated interchange price before September 30, 2023.- When the additional charges are implemented, the PPI issuer will be required to pay a wallet-loading service fee of around 15 basis points to the remitter bank. There will be no interchange between the bank account and the PPI wallet for peer-to-peer (P2P) or peer-to-peer-merchant (P2PM) transactions.
‘There is no charge to customers’, NPCI clarifies on charges:
Have you received a WhatsApp forward stating that UPI is no longer free and that you must pay a fee for online transactions? Don’t worry, such messages are deceptive and fraudulent.
Customers will not be charged, according to a statement issued by the National Payment Corporation of India (NPCI) via its official Twitter handle. Prepaid Payment Instruments are subject to interchange charges under the rule (PPI). This means that UPI transactions made through PPIs such as wallets and credit cards will incur a 1.1% interchange fee.
Furthermore, there are no fees for bank account to bank account UPI payments, also known as standard UPI payments. “With this addition to UPI, customers will be able to use any bank account, Rupay Credit card, and prepaid wallets on UPI enabled apps,” NPCI’s Twitter post adds.
