Yes, the news of UPI not being free is probably one of the news people did not expect to come up. As this is happening, the news is true but the transaction is not going to cost everyone money.
While UPI transaction is not a new word to people, let’s be clear about what is it.
What is a UPI transaction?
The National Payments Corporation of India created the instant real-time payment system known as UPI. (NPCI). Peer-to-peer, person-to-merchant, and person-to-merchant (for small merchants and the unorganized retail industry) transactions are all made possible by UPI.
“The National Payments Corporation of India (NPCI) has issued a circular in which it suggested “Prepaid Payment Instruments (PPI)” fees on merchant transactions on Unified Payments Interface (UPI). The governing body of the UPI payment system added that the PPI fees would be levied on transactions above ₹2,000 on UPI. It will result in an interchange at 1.1% of the transaction value.” wrote Mint.
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Rajsri Rengan, India Head of Development, Banking and Payments, at FIS in a statement said, ”The new interoperability guidelines for prepaid payment instruments announced by the NPCI is a significant step towards building a more inclusive and seamless digital payments ecosystem in India. The interoperability of digital wallets and UPI can be a game-changer for the Indian fintech industry, as it opens up new opportunities for innovation, growth, and competition. With greater interoperability between payment systems, consumers will have more choice and flexibility in how they transact with merchants, leading to increased adoption of digital payments and ultimately driving financial inclusion and economic growth.”
The interchange fee is assessed to defray the expenses associated with transaction authorization, processing, and acceptance. This will probably increase the price of the purchase. The new regulation will go into effect on April 1. The circular stated that for loading a transaction value above Rs. 2,000, the issuer of prepaid instruments will also be required to pay 15 basis points of the charge to the remitter bank.
Who has to pay the charges?
However, the charge will not be applied to transfers between a bank and the prepaid wallet that are between people or between people and merchants.
Paytm Payments Bank took to Twitter to announce,” “Regarding NPCI circular on interchange fees & wallet interoperability, no customer will pay any charges on making payments from #UPI either from bank account or PPI/Paytm Wallet. Please do not spread misinformation. #Mobile payments will continue to drive our economy forward!.”
While you can rest assured and do your payments from UPI without worrying about extra charges, you should be aware of the news.
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