UPI Payment Charges: NPCI announces UPI payment charges in circular

UPI Payment Charges: Since the introduction of UPI, there has been a significant revolution in the digital payment sector within the country. Nowadays, from small shopkeepers to large e-commerce companies, many are connected to the UPI network. In recent years, there has been a record increase in transactions made through UPI. Most people prefer to make payments through UPI nowadays. However, from the new financial year starting on April 1, a transaction fee of 1.1% of the transaction value will have to be paid for using UPI with a PPI for transactions exceeding Rs. 2,000. NPCI (National Payments Corporation of India) has issued a circular related to UPI. It mentions charging prepaid payment instruments or PPI for merchant payments made through UPI. Let’s find out more about it.

UPI Payment Charges
UPI Payment Charges : photo : twitter/@rbi

Transactions over Rs. 2,000 will be charged an interchange fee.

UPI Payment Charges
UPI Payment Charges : photo : istock
  • According to media reports, NPCI’s circular states that an interchange fee will be levied on transactions over Rs. 2,000.
  • Under this, a total of 1.1% of the transaction value will have to be paid as an interchange fee for using UPI through PPI for transactions over Rs. 2,000.
  • NPIC’s press release states that they have allowed the integration of prepaid payment instruments (PPIs) with the UPI interoperable ecosystem.
  • As a result, merchants using PPIs will have to pay an interchange fee for transactions.
  • However, there will be no interchange fee for transferring money from one bank account to another.
  • Interchange charges are to be paid for merchant transactions.
  • The circular also mentions that there are no fees for peer-to-peer and peer-to-peer merchant transactions that occur between bank accounts and PPi wallets.

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Starting from April 1st, a new rule will be implemented.

UPI Payment Charges : photo : istock
  • A new rule will come into effect from April 1, 2023.
  • National Payment Corporation of India will review this rule before September 30, 2023.

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Do you have to pay any fee to send money to friends, family or any other person via UPI?

If you’re wondering about UPI payment charges, you’ll be glad to know that NPCI has clarified that there won’t be any interchange fee for P2P transactions, P2PM transactions, or transactions between banks and prepaid wallets. This means that when you send money to friends, family members, or small business merchants with a monthly inward UPI transaction of Rs. 50,000 or less, you won’t have to worry about paying any UPI payment charges.

Which UPI payments will attract an interchange fee?

If you’re concerned about UPI payment charges, it’s worth noting that the NPCI has clarified that only specific merchant transactions involving prepaid payment instruments will attract an interchange fee. Prepaid payment instruments encompass items such as wallets, smart cards, vouchers, and magnetized chips. Popular examples of wallets include Paytm, PhonePe, Amazon Pay, MobiKwik, and Sodexo vouchers.

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Will you have to pay a fee to recharge your Paytm, PhonePe, or Amazon Pay wallet?

The NPCI has requested that prepaid payment instrument issuers pay a wallet-loading service charge of 15 basis points to the remitter bank for wallet reloads exceeding Rs 2,000. For example, if you top up your Paytm, PhonePe, or Amazon Pay wallet with more than Rs 2,000, Paytm will pay your bank a wallet-loading service charge of 0.15%.

Currently, there are no extra fees for reloading your wallet for UPI transactions. However, if wallet issuers choose to pass on this wallet-loading service charge to users, you may need to pay an additional fee in the future.

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