Fees On UPI Transaction: The NPCI has proposed transaction fees of up to 1.1 percent for increasing revenue for banks and payment service providers. UPI Payment New Rules Applicable From 1 April, 2023.
The new fees on UPI transactions will only be applicable to merchants who accept payments over Rs 2,000.
The National Payments Corporation of India (NPCI) has recommended transaction fees on Unified Payments Interface (UPI) transactions of over Rs 2,000 made through Prepaid Payment Instruments (PPIs).
Fees On UPI Transaction Over Rs. 2,000 | Charges On UPI Payment In India
The NPCI is aimed at increasing revenue for banks and payment service providers, who have been struggling with the high cost of UPI transactions. The pricing will be reviewed by September 30, 2023.
UPI is currently the most preferred and the most used payment method in India that allows users to transfer money between bank accounts instantly using their mobile phones. On the other hand, PPIs are digital wallets that allow users to store money and make payments.
What is the Meaning of Prepaid Payment Instruments (PPIs)?
PPI stands for Prepaid Payment Instruments. There are a couple of PPIs in India for example Paytm, PhonePe, and Google Pay.
Interchange fees (Transaction Fees) is a fee that is charged by one bank to another bank for processing a transaction. In the case of UPI transactions, the interchange fee is paid by the bank of the merchant (the person or business receiving the payment) to the bank of the payer (the person making the payment).
Currently, most UPI transactions are for smaller amounts. The NPCI believes that providers encourage users to promote UPI transactions for higher amounts, the average transaction value of UPI transactions can be increased, and the overall cost of payment systems in India can be reduced.
So, the users will not bear any fees or surcharge on UPI Payment. The new fee on UPI payment will only be applicable to merchants who accept payments over Rs 2,000 using prepaid payment instruments (PPIs) such as mobile wallets. Individual users making personal transactions using UPI will not be charged any additional fees.
The users will be charged for every UPI payment?
No, the User will not be charged On UPI Payment. This fees or charge is applicable on merchants only.
Why NPCI has proposed to charge fees on UPI Payment?
The NPCI is aimed at increasing revenue for banks and payment service providers.
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