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No charge for customers for normal UPI payments: NPCI clarifies

NPCI has issued a circular saying that there will be an interchange fee of 1.1 per cent on UPI transactions made through PPI instruments like wallets or cards.

NPCI, UPI payment, indian expressNPCI said that an interchange charge has been introduced for PPI (prepaid payment instrument) merchant transactions — but customers will not be charged. (File)
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National Payments Corporation of India (NPCI), the retail payments and settlement body, on Wednesday (March 29) clarified that there are no charges for bank account-to-bank account-based UPI payments, which are the “normal” UPI payments for most people.

However, NPCI said that an interchange charge has been introduced for PPI (prepaid payment instrument) merchant transactions — but customers will not be charged.

The clarification came after media reports suggested that NPCI has issued a circular saying that there will be an interchange fee of 1.1 per cent on UPI transactions made through PPI instruments like wallets or cards. This charge will be applicable for transactions above Rs 2,000, as per the reports.

The said circular was not publicly available.

In a statement issued on Wednesday, NPCI said that as per recent regulatory guidelines, PPI wallets have been permitted to be part of the interoperable UPI ecosystem.

“The interchange charges introduced are only applicable for the PPI merchant transactions and there is no charge to customers, and it is further clarified that there are no charges for the bank account to bank account-based UPI payments (i.e. normal UPI payments),” NPCI said.

Traditionally, the most preferred method of UPI transactions is linking the bank account in any UPI enabled app for making payments which contributes over 99.9 per cent of total UPI transactions.

These bank account-to-account transactions continue to remain free for customers and merchants, the statement said.

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