The National Payments Corporation of India (NPCI) has issued a circular advising that Prepaid Payment Instruments (PPI) fees. The fees applied to merchant transactions on Unified Payments Interface (UPI) beginning on April 1, 2023.
New UPI Charge & Date
For transactions over Rs 2,000, using PPIs on UPI will result in interchange fees at 1.1 per cent of the transaction value.
Interchange fees typically associated with card payments and cover the costs of accepting, processing, and authorising transactions. Peer-to-peer (P2P) and peer-to-peer-merchant (P2PM) transactions between a bank account and a PPI wallet do not require an interchange. The PPI issuer will pay the remitter bank around 15 basis points as a wallet-loading service charge for P2P and P2PM transactions. The NPCI charges interchange fees ranging from 0.5 to 1.1 percent depending on the sector. Fuel is charged at 0.5 percent, while investment funds, government agencies, insurance companies, and railroads are charged 1 percent.
The NPCI will review the pricing before September 30, 2023.
About
Individuals in India can use their smartphones to transfer money directly between bank accounts through the Unified Payments Interface (UPI), without the need to enter bank account details or net banking passwords, as it is a real-time payment system.
Benefits
- Simple and Convenient: UPI provides a user-friendly platform for seamless money transfers between bank accounts. It is easy to use and offers a simplified payment process.
- Instant Transactions: UPI processed transactions in real-time, meaning that the money is transferred instantly to another.
- Secure: Multi-factor authentication protects UPI transactions. The user needs to enter their MPIN (Mobile Personal Identification Number) to complete a transaction.
- Cost-effective: UPI is a cost-effective payment system, as it eliminates the need for third-party payment apps and transaction charges.
- Widely Accepted: UPI is widely accepted in India and can be used to make payments at a variety of merchants, including online stores, supermarkets, and even small retailers.
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