UPI money transaction to be chargeable from April 1, see charges and payable transactions
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New Delhi: The National Payments Corporation of India (NPCI) has notified that the interchange fee for transactions through Prepaid Payment Instruments (PPIs) through UPI will be effective from April 1, NDTV reported.
As per a recent circular by the NPCI, the said type of transaction, if it is more than Rs 2,000, would attract the interchange fee, which varies for different categories of merchants, ranging from 0.5 per cent to 1.1 per cent. There will be a cap applicable for certain categories too.
A Wednesday notification also stated that the interchange fee would be applicable only for merchant transactions that are made through PPIs. There will be no charges on normal UPI payments, that is, "bank account-to-bank account-based UPI payments."
The interchange fee goes like this: for telecom, education, and utilities/post office, it is 0.7 per cent of the transaction value; for supermarkets, 0.9 per cent; for insurance, government, mutual funds, and railways, it is 1 per cent; for fuel 0.5 per cent and 0.7 per cent for agriculture.
The fee would not be applied to peer-to-peer (P2P) transactions or peer-to-peer-merchant (P2PM) transactions. PPP issuers will have to pay 15 basis points (bps) to the remitter bank as a wallet-loading charge. NPCI has informed that the pricing will be reviewed on September 30, 2023.
The Union Finance Ministry had asserted in August last year that UPI is a digital good and it will not be levying charges on UPI transactions.
"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 of any charges for UPI services. The concerns of the service providers for cost recovery have to be met through other means," a ministry tweet had said.
