UPI customers will not have to pay any extra charge or fee for any UPI transaction.
The National Payment Corporation of India (NPCI) has clarified.
However, as per a new rule, only certain UPI transactions which are made via prepaid instruments will carry an interchange fee of 1.1%. But this fee is applicable only to the merchants and not to customers.
This 1.1% interchange fee will be levied on transactions above Rs 2000 made to online merchants, large merchants, and small offline merchants as per the circular by NPCI, which governs UPI.
The interchange fee will range from 0.5% to 1.1% depending of the category of merchants. And this will be applicable from the first of April.
In its clarification, NPCI said, “Bank account to account transactions continue to remain free for merchants and customer. NPCI has now permitted PPI wallets (Prepaid payments instruments) to be part of interoperable UPI ecosystem. The interchange charges are only applicable for PPI merchant transactions and there is no charge to customers.” Experts say, with this, customers will be able to use any bank account, RuPay Credit card and prepaid wallets on UPI enabled apps and merchants will be able to accept payments irrespective of the wallet being used by the customer.
“It will eliminate the need for specific integrations with a particular wallet to accept payments on a website since customers can also pay via UPI or card infrastructure. This will increase the payment alternatives for customers.” Akash Sinha, Co-founder & CEO at Cashfree Payments, told CNBC-TV18.