In news– The National Payments Corporation of India (NPCI) has proposed new rules for UPI transactions.
What are the new rules?
- From April 1, some Unified Payments Interface (UPI) transactions of over ₹ 2,000 will attract an interchange fee of 1.1 per cent.
- According to NPCI, the interchange fees will only be applicable for the prepaid payment instruments (PPI) merchant transactions and there is no charge to customers.
- The interchange fee varies for the different categories of merchants. It ranges from 0.5% to 1.1% and a cap is also applicable in certain categories.
- The move is reportedly aimed at increasing revenue for banks and payment service providers, who have been struggling with the high cost of UPI transactions.
- Interchange will not be applied in the case of peer-to-peer (P2P) and peer-to-peer-merchant (P2PM) transactions.
- There is also no charge for the bank account to bank account-based UPI payments or normal UPI payments.
- 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).
- After the new rules, customers will have the choice of using any bank account, RuPay Credit card and prepaid wallets on UPI-enabled apps.
What does PPI payment mean?
PPI payment simply means transactions through digital wallets. For instance: any payment made through PayTM wallet or PhonePe wallet will charge merchants some amount. NPCI is calling it an interchange fee.
Further reading: https://journalsofindia.com/national-payments-corporation-of-india-npci/
Source: India Today
