Recently, NPCI issued a circular informing that interchange fees will be levied for using Prepaid Payment Instruments (PPIs) for transactions through UPI. This fee will be levied on transactions above Rs 2,000. The interchange fee varies from 0.5% to 1.1% depending on the category of merchant.
In its circular issued on Wednesday, NPCI said that the new fee will be applicable only on merchant transactions done through prepaid payment instruments. Further, it has also been clarified that no charges will be levied on normal UPI payments, which have been termed as “bank account-to-account based UPI payments”.
NDTV’s AccordingThe interchange fee for , telecom, education and utilities/post office is 0.7%, while the fee for supermarkets is 0.9% of the transaction value. While the fees for insurance, government, mutual funds and railways are reportedly 1%, 0.5% for fuel and 0.7% for agriculture.
All these fees will be applicable from April 1. The pricing will be reviewed by NPCI on or before September 30, 2023.
The report further states that the interchange will not be applicable in case of peer-to-peer (P2P) and peer-to-peer-merchant (P2PM) transactions. The PPP issuer will have to pay 15 basis points (bps) to the bank as a wallet-loading fee for transactions above Rs 2,000.