New Delhi [India], March 29 : The National Payments Corporation of India (NPCI) cleared the air on Wednesday about the recently introduced interchange charges, saying they are only applicable for the prepaid payment instruments (PPI) transactions and there is no charge to customers.
It also clarified that there will be no charges for the bank account to bank account-based UPI payments normal UPI payments.
In a recent circular, the NPCI reportedly said that using prepaid payment instruments (PPIs) - gift cards, wallets, among others for transactions through UPI will attract an interchange fee of up to 1.1 per cent starting April 1. The charges will be levied if the transaction is more than Rs 2,000.
Every month, over eight billion transactions are processed for free for customers and merchants, according to NPCI. UPI has emerged as a preferred mode of digital payment by offering a free, fast, secure and seamless experience.
UPI is an instant payment system developed by the National Payments Corporation of India (NPCI). It powers multiple bank accounts into a single mobile application, merging several banking features, providing seamless merchant payments.
Traditionally, the most preferred method of UPI transactions is linking the bank account in any UPI-enabled app for making payments, and they contribute about 99.9 per cent of total UPI transactions. These bank account-to-account transactions continue to remain free for customers and merchants.
"Recent regulatory guidelines, the Prepaid Payment Instruments (PPI Wallets) have been permitted to be part of interoperable UPI ecosystem. In view of this NPCI has now permitted the PPI wallets to be part of 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 on Wednesday.
National Payments Corporation of India (NPCI) was incorporated in 2008 as an umbrella orgzation for operating retail payments and settlement systems in India.
NPCI is focused on bringing innovations in the retail payment systems through the use of technology and is relentlessly working to transform India into a digital economy.
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