New Delhi: The National Payments Corporation of India (NPCI) on Wednesday 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.
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 ₹2,000.
The interchange fee varies for different categories of merchants. It ranges from 0.5 per cent to 1.1 per cent and a cap is also applicable in certain categories.
In a notification, 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.”
NPCI Press Release: UPI is free, fast, secure and seamless
Every month, over 8 billion transactions are processed free for customers and merchants using bank-accounts@EconomicTimes @FinancialXpress @businessline @bsindia @livemint @moneycontrolcom @timesofindia @dilipasbe pic.twitter.com/VpsdUt5u7U
— NPCI (@NPCI_NPCI) March 29, 2023
For telecom, education, and utilities/post office, the interchange fee is 0.7 per cent, while for supermarkets the fee is 0.9 per cent of the transaction value. One per cent charges will be levied for insurance, government, mutual funds, and railways, 0.5 per cent for fuel, and 0.7 per cent for agriculture, according to a TV channel report.
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 ₹2,000.
The pricing will be reviewed by the NPCI on or before September 30, 2023.
(With Agency Inputs)
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