UPI Transaction Charges: Earlier it was being claimed in the news that now a charge of 1.1 percent will have to be paid on payment through UPI, which was wrong. According to the NPCI circular, the interchange fee applicable on transactions above Rs 2,000 will be applicable only on Prepaid Payment Instrument (PPI) transactions.
What Is PPI: NPCI on Wednesday clarified the situation regarding the charge on Unified Payment Interface (UPI). It was told by NPCI that the UPI payment made from account to account will not have any effect on the customers. Earlier it was being claimed in the news that now a charge of 1.1 percent will have to be paid on payment through UPI, which was wrong. According to the NPCI circular, the interchange fee applicable on transactions above Rs 2,000 will be applicable only on Prepaid Payment Instrument (PPI) transactions.
Tremendous increase in UPI users
In the last few years, there has been a tremendous increase in UPI users. It has been made completely clear from NPCI that the way UPI has been used earlier by the customers, it will be used in the coming days as well. But people are still confused about PPI Payment. After all, what is PPI, let’s know?
What is PPI?
There are prepaid payment instruments (PPIs) like online wallets, smart vouchers, smart cards and many more. Keeps a special prepaid amount which the user can use to buy any item, mobile recharge etc. For example, Paytm Wallet is an example of PPI. You can also say this in other words that such payment apps, in which you do some shopping with the money already inserted (money inserted through wallet or gift card).
What was said in the circular of NPCI?
According to the new circular of NPCI, from April 1, 2023, a charge of 1.1% will be levied on UPI payments above Rs 2000 made through Prepaid Payment Instrument (PPI). This will also be applicable for adding money to the wallet through UPI. There is no charge for bank to bank transfer through UPI.
Who will pay the interchange fee?
From April 1, 2023, the merchant will pay the receiver bank / payment provider for UPI transactions above Rs 2,000 done through the PPI. No amount will be paid by the customer.
What is PPI payment through UPI?
For example, if you are paying a merchant through Paytm Wallet. Once you scan the merchant’s QR code, it will allow you to make payments directly to the merchant’s bank account. From April onwards, an interchange fee of up to 1.1% will be levied on transactions above Rs 2000. Which has to be paid by the merchant.
