UPI payments through bank accounts continue to be free for merchants and customers while only the Prepaid Payment Instruments (PPI) wallet merchant transactions are chargeable, said National Payments Council of India in a statement on Tuesday."The Prepaid Payment Instruments (PPI wallets) have been permitted to be part of interoperable UPI ecosystem. And the interchange charges are applicable only for the PPI merchant transactions," said the statement.
Prepaid Wallets are financial instruments that help in the transfer of money in digital form. As per RBI's list of authorised prepaid wallets there are more than 50 including the likes of PhonePe, AmazonPay and Bajaj Finance.The NPCI has set an interchange fee at 1.1 percent for merchant transactions initiated on the Unified Payments Interface (UPI) network with effect from April 1. This comes as a clarification after several citizens took it to social media and said that UPI is chargeable. NPCI's chief executive officer Dilip Asbe wrote on Twitter that there is no change in any charges regarding UPI payments from bank accounts.