Wallet payments may have a transaction fee, UPI to remain free
The National Payments Corporation of India (NPCI) has recommended an interchange fee on Unified Payments Interface (UPI) transactions of over Rs 2,000 made through Prepaid Payment Instruments (PPIs). Regarding NPCI circular on interchange fees & wallet interoperability, no customer will pay any charges on making payments from UPI either from bank account or PPI/Paytm Wallet. Please do not spread misinformation. Mobile payments will continue to drive our economy forward!" read the post shared by the official Twitter handle of Paytm Payments Bank. The move is said to be aimed at increasing revenue for banks and payment service providers, who are reportedly been struggling with the high cost of UPI transactions. The fee will be charged from April 1 and the interchange pricing will be reviewed by September 30, 2023.
In a recent circular, the NPCI said that using Prepaid Payment Instruments (PPIs) for transactions through UPI will attract an interchange fee. The charges will be levied if the transaction is more than Rs 2,000.
The interchange fee varies for the different categories of merchants. It ranges from 0.5% to 1.1% and a cap is also applicable in certain categories.
Update: The earlier version of the story had a headline that said: "UPI transactions of more than Rs 2,000 to be charged at 1.1 per cent starting April 1, all details". However, this is not the case. As NPCI clarified, the fee of 1.1 per cent will not be charged on UPI payments but only on payments of Rs 2000 or higher made from digital wallets to UPI IDs.
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