HomeFintechNPCI: Interchange fee up to 1.1% on UPI transactions above Rs 2,000 through PPI

NPCI: Interchange fee up to 1.1% on UPI transactions above Rs 2,000 through PPI



The National Payments Corporation of India (NPCI) which manages and operates the UPI platform has announced that an interchange fee of up to 1.1 percent on transactions above Rs 2,000 will be imposed on merchant transactions made through Prepaid Payment Instruments (PPIs) on the Unified Payments Interface (UPI) from April 1.

According to the statement, the interchange fee will apply only to transactions made through prepaid payment instruments, and not to direct bank-to-bank account-based UPI payments.

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The charges will be levied only if the transaction amount is above 2,000. The fee will range from 0.5% to 1.1% depending on the merchant’s category.

The NPCI clarified that peer-to-peer (P2P) and peer-to-peer-merchant (P2PM) transactions will not attract an interchange fee while wallet-loading charges of 15 basis points (bps) will be imposed on PPI issuers for transactions over ₹ 2,000.

NPCI will review the pricing policy on or before September 30, 2023. The move is to incentivize bank account-to-bank account-based transactions over PPI-based transactions. It is aimed at promoting UPI transactions and bolstering the digital payments ecosystem in the country.


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Krishna Mali
Krishna Mali
Founder & Group Editor of TechGraph.

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