Winning Bizness Desk
Mumbai. The National Payments Corporation of India (NPCI) said that using Prepaid Payment Instruments (PPIs) for transactions more than Rs 2000 through UPI, then it will attract an interchange fee. NPCI has notified this interchange fee of up to 1.1 per cent and it will be applicable on merchant UPI (Unified Payments Interface) transactions from April 1. The interchange fee varies for the different categories of merchants which ranges from 0.5% to 1.1% and a cap is also applicable in certain categories. In a notification issued on Wednesday, NPCI said that the introduced fee is only applicable for merchant transactions made through prepaid payment instruments. The payments body clarified that no charges will be levied on normal UPI payments which it termed as "bank account - to-bank account based UPI payments.
Applicable from April 1.
NPCI clarified that interchange will not be applied in the case of peer-to-peer (P2P) and peer-to-peer-merchant (P2PM) transactions. PPP issuers will be required to pay 15 basis points (bps) to the remitter bank as a wallet-loading charge for transactions of over ₹ 2,000. The pricing will be reviewed by the NPCI on or before September 30, 2023.
What finance ministry had said
In August last year, the Finance Ministry stated that UPI is a digital public good and that it was not considering levying any charges on transactions made through it. “UPI is a digital public good with immense convenience for the public & productivity gains for the economy. There is no consideration in Govt to levy any charges for UPI services. The concerns of the service providers for cost recovery have to be met through other means,” the ministry tweeted.
