New Delhi: Payments using digital wallets via Unified Payments Interface (UPI), — including Paytm, Gpay, PhonePay — will from 1 April attract 1.1 per cent fee if the amount of the transaction is Rs 2000 or more.
In a notification, the National Payments Corporation of India (NPCI), which is the governing body of UPI, has advised that Prepaid Payment Instrument (PPI) fees should be applied to merchant transactions on UPI from next month.
NPCI said the interchange fee is levied to cover the costs of accepting, processing, and authorising transactions. This in-turn will make transaction costlier.
“NPCI has now permitted the PPI wallets to be part of interoperable UPI ecosystem. The interchange charges introduced are only applicable for the PPI merchant transactions and there is no charge to customers and it is further clarified that there are no charges for the bank account to bank account based UPI payments,” the circular read.
NPCI said it will review pricing on or before 30 September, 2023.
What to know?
1.1 per cent fee will be charged on Rs 2,000 and above UPI transaction made through via PPIs, such as digital wallets like Paytm wallet
Any wallet transaction below Rs 2,000 will not attract charge
No fee would be charged on regular UPI transactions made directly from bank account to bank account
The charge will be levied on the merchant side and they may or may not choose to pass on the extra fee to consumers.
PPIs are digital wallets on UPI which enable users to store money and make payments.
What is interchange fee?
An interchange fee is the amount charged by one bank to another bank for processing a transaction. In case of UPI transactions, the interchange fee is paid by the bank of the merchant (the person/ business receiving the payment) to the bank of the payer (person making the payment).
Will customers be charged for payments using UPI?
Customers won’t be charged the fee. The interchange charges introduced are applicable only for the PPI merchant transactions. Also, there won’t be any charge on bank account to bank account-based UPI payments.
NPCI said the proposed interchange fee is in line with the recommendations of the Committee on Payments and Market Infrastructures and the World Bank, which suggest an interchange fee of up to 1.15 per cent for UPI transactions.
With inputs from agencies
Read all the Latest News, Trending News, Cricket News, Bollywood News,
India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.