The National Payments Corporation of India (NPCI) clarified the recently announced interchange costs on Wednesday, stating that they are solely relevant to prepaid payment instruments (PPI) transactions and that there is no price to users. It also stated that there will be no fees for bank account to bank account UPI transfers – standard UPI payments.
In a recent circular, the UPI regulatory body said that for sums greater than Rs 2,000, transactions utilising PPIs (gift cards, wallets, and so on) through UPI will be charged 1.1% percent of the transaction value. The interchange price will be implemented on April 1, 2023, and will be evaluated again by September 30, 2023.
The retail payments and settlement organization, National Payments Corporation of India (NPCI), confirmed on Wednesday (March 29) that there are no charges for bank account-to-bank account-based UPI transfers, which are the “typical” UPI payments for most consumers.
According to NPCI, an interchange charge for PPI (prepaid payment instrument) business transactions has been implemented, however customers will not be charged.
What exactly are PPI transactions?
Online wallets (such as Paytm Wallet, Amazon Pay Wallet, PhonePe Wallet, and others) and preloaded gift cards are examples of prepaid payment instruments (PPI).
A PPI payment made over UPI refers to a transaction made through such a wallet using a UPI QR code.
What is said in the most recent NPCI circular?
According to a statement made by NPCI on Wednesday, PPI wallets are now allowed to be a part of the interoperable UPI ecosystem due to updated regulatory requirements.
“The interchange costs imposed are only applicable for PPI merchant transactions and there is no price to customers, NPCI explained. “It is also stressed that there are no charges for bank account to bank account-based UPI payments (i.e. standard UPI payments).
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