National Payments Corporation of India (NPCI) announced extra charges on Payment Instrument charges for UPI payments. This extra charge will be applicable for merchants transaction over Rs 2000 from April 1, 2023.
What is UPI?
Unified Payments Interface is an instant real-time payment system developed by National Payments Corporation of India. The interface facilitates inter-bank peer-to-peer and person-to-merchant transactions. It is used on mobile devices to instantly transfer funds between two bank accounts.
According to reports on internet, the NPCI published a circular on March 24.
From April 1, 2023, the new financial year is going to start. Along with it, the charges on UPI Transaction over Rs 2000 is also applicable for merchants transactions.
NPCI taking this charges as Prepaid Payment Instrument(PPI). NPCI published a circular of this PPI charges in details. The proposed charges are between 0.5-1.1 per cent on over Rs 200 transaction.
As per NPCI Circular, the following are the charges as mentioned below fro different merchants;
- 0.5 % for fuel,
- 0.7 % for telecom, utilities/post office, education, agriculture,
- 0.9 % for supermarket and 1 per cent for mutual fund, government, insurance, and railways.
Prepaid Payment Instruments include online wallets like Google Pay, PhonePe, PayTM, BHIM App, Amazon Pay, pre-paid gift cards, etc.
Interchange will not be applicable on P2P (Peer-to-Peer) and P2PM (Peer-to-Merchants) transactions between bank accounts and PPI wallets.
What is a PPI payment?
A PPI payment via UPI means a transaction done via a wallet, like PayTM Wallet, through a UPI QR code.
For example, if you have money in your PayTM Wallet and want to make a payment via a merchant’s UPI QR code, then on transactions above ₹2,000, an interchange fee of up to 1.1% will charged.
NPCI, UPI’s governing body, will review the stated pricing on or before September 30, 2023.
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