In a recent circular, the National Payments Corporation of India (NPCI) recommended that costs for Prepaid Payment Instrumentation (PPI) be added to merchant transactions on Unified Payments Interface (UPI) commencing on April 1. These fees are to be paid by the merchant.
The regulatory body of UPI, NCPI, stated in the circular that the interchange fee for utilizing PPIs on UPI will be 1.1% of the transaction value for sums that are greater than Rs 2,000.
On April 1, 1.1% will be charged for UPI merchant transactions exceeding Rs 2,000.
The interchange fee is a charge that is often linked with card payments and is assessed in order to cover the expenses of accepting, processing, and authorizing transactions.
P2P and P2PM transactions that take place between a bank account and a PPI wallet do not require an interchange. Instead, the PPI issuer will pay the remitter bank roughly 15 basis points in the form of a wallet-loading service charge.
The introduction of interchange ranges from 0.5 to 1.1 percent, with 0.5 percent being introduced for fuel, 0.7 percent being introduced for telecom, utilities/post office, education, and agriculture, 0.9 percent being introduced for supermarkets, and 1 percent being introduced for mutual funds, the government, insurance, and railways.
The new price structure is scheduled to go into effect on April 1st, 2023. According to the circular, NPCI will conduct a review of the indicated price on or before September 30, 2023.