UPI merchant transactions over Rs 2,000 to be charge with 1.1% interchange fees
UPI merchant transaction of over Rs 2,000 made via PPI will be charged with interchange fee of 1.1 per cent starting April 1, 2023.
The National Payments Corporation of India (NPCI) has recommended Prepaid Payment Instruments (PPI) fees to be applied to merchant transactions on Unified Payments Interface (UPI) beginning on April 1 in a recent circular.
NCPI stated that transactions of amounts over Rs 2,000, using PPIs on UPI will result in interchange at 1.1 per cent of the transaction value. That means UPI merchant transaction of over Rs 2,000 made via PPI will be charged with interchange fee of 1.1 per cent starting April 1, 2023.
The interchange fee is typically associated with card payments.It is imposed to cover the costs of accepting, processing, and authorising transactions.
The users don’t need to pay interchange fees in terms of Peer-to-peer (P2P) and peer-to-peer-merchant (P2PM) transactions between a bank account and a PPI wallet, and the PPI issuer will pay the remitter bank approximately 15 basis points as a wallet-loading service charge.
That means the interchange fee will not be applicable for person-to-person transactions or person-to-merchant transactions between a bank and the prepaid wallet.
Introduction of interchange is in the range of 0.5-1.1 percent, with interchange being 0.5 per cent for fuel, 0.7 per cent for telecom, utilities/post office, education, agriculture, 0.9 per cent for supermarket and 1 per cent for mutual fund, government, insurance and railways.
As per the NPCI circular the pricing will come into effect starting April 1 and the pricing will be reviewed by the UPI’s government body on or before Sept. 30, 2023.
Ms Kalinga