New Delhi: A recent circular from the National Payments Corporation of India (NPCI) has announced that Prepaid Payment Instruments (PPI) fees will be charged to merchant transactions on the Unified Payments Interface (UPI) starting from April 1. The circular stated that transactions over Rs 2,000 using PPIs on UPI will incur an interchange fee of 1.1% of the transaction value, a fee usually associated with card payments to cover transaction costs.
However, the circular also noted that peer-to-peer (P2P) and peer-to-peer-merchant (P2PM) transactions between a bank account and a PPI wallet would not require an interchange fee. Instead, the PPI issuer will pay a wallet-loading service charge of approximately 15 basis points to the remitter bank.
The interchange fee will range from 0.5% to 1.1%, depending on the type of transaction. The fee for fuel will be 0.5%, while telecom, utilities/post office, education, agriculture, will be 0.7%. For supermarkets, it will be 0.9%, and for mutual funds, government, insurance, and railways, it will be 1%.
These pricing changes will come into effect on April 1, 2023. The circular also mentioned that the NPCI would review the pricing on or before September 30, 2023.
Comments are closed.