UPI Merchant Payments Over Rs 2,000 To Attract Fee, No Charge To Customers

The National Payments Corporation of India (NPCI) has notified that an interchange fee of up to 1.1 per cent will be applicable on merchant UPI (Unified Payments Interface) transactions from April 1. 

In a recent circular, the NPCI said that using Prepaid Payment Instruments (PPIs) for transactions through UPI will attract an interchange fee. The charges will be levied if the transaction is more than Rs 2,000.

The interchange fee varies for the different categories of merchants. It ranges from 0.5% to 1.1% and a cap is also applicable in certain categories.

In a notification issued today, NPCI said that the introduced fee is only applicable for merchant transactions made through prepaid payment instruments. The payments body clarified that no charges will be levied on normal UPI payments which it termed as "bank account- to-bank account based UPI payments."

For telecom, education, and utilities/post office, the interchange fee is 0.7% while for supermarkets the fee is 0.9% of the transaction value. 1% charges will be levied for insurance, government, mutual funds, and railways, 0.5% for fuel, and 0.7 for agriculture, reported CNBC TV-18.

The charges will be applicable from April 1.

Interchange will not be applied in the case of peer-to-peer (P2P) and peer-to-peer-merchant (P2PM) transactions. PPP issuers will be required to pay 15 basis points (bps) to the remitter bank as a wallet-loading charge for transactions of over Rs 2,000. 

The pricing will be reviewed by the NPCI on or before September 30, 2023.

In August last year, the Finance Ministry stated that UPI is a digital public good and that it was not considering levying any charges on transactions made through it. “UPI is a digital public good with immense convenience for the public & productivity gains for the economy. There is no consideration in Govt to levy any charges for UPI services. The concerns of the service providers for cost recovery have to be met through other means,” the ministry tweeted.

The statement had come after the RBI issued a discussion paper that said that UPI as a fund transfer system is like IMPS (Immediate Payment Service) and hence it could be argued that charges in UPI could be similar to those levied on IMPS fund transfers.

from NDTV News- Topstories https://ift.tt/GFVmZIM