The National Payments Corporation of India (NPCI) has announced that merchants using Unified Payments Interface (UPI) for transactions will have to pay an interchange fee of up to 1.1% from April 1, 2023.
However, this fee will only apply to transactions made through Prepaid Payment Instruments (PPIs) and only for transactions above ₹2,000. The interchange fee will vary based on different categories of merchants and a cap will be applicable in certain categories. Normal UPI payments made from bank account to bank account will not attract any charges. Peer-to-peer (P2P) and peer-to-peer-merchant (P2PM) transactions will also not be subject to the interchange fee. Wallet issuers will be required to pay 15 basis points (bps) to the remitter bank as a wallet-loading charge for transactions over ₹2,000.
The NPCI will review the pricing on or before September 30, 2023. The announcement came after the RBI issued a discussion paper suggesting that UPI charges could be similar to those levied on IMPS fund transfers, given that UPI is also a fund transfer system like IMPS.
The news about charges being levied on every transaction exceeding Rs.2000 has caused a huge uproar already among consumers in India and in this regard, this announcement has been made today.
