If you use UPI for daily transactions, brace yourself for important news. Starting April 1, NPCI (National Payments Corporation of India) is implementing an interchange fee on UPI transactions. It means that merchant UPI transactions made through Prepaid Payment Instruments (PPI) like mobile wallets and Amazon Pay will now be charged a fee of 1.1% on transactions above ₹2,000.
But before you panic, there’s good news. This fee won’t apply to P2P and P2M transactions, and users won’t be charged. Additionally, there will be a lower fee of 0.5% for fuel purchases and 0.7% for agriculture, education, and telecom needs.
The PPI issuer, however, must tack on a 15 basis point (bps) service fee each ₹2,000 is added to the wallet. It will be payable to the account holder’s bank. On September 30, NPCI will examine the effect of this new adjustment.
It is a big deal since the UPI procedure required no fees and no merchant discount rate (MDR) before. This new development might not make merchants happy, but it’s important to note that UPI’s interoperability will be enhanced by allowing payments through any UPI app or by scanning any UPI QR code.
Keep reading to learn more, and share your ideas in the comments below.