Beginning April 1, individuals using PPI to make UPI payments in India will be required to pay a 1.1% fee on payments over Rs 2,000. (Prepaid Payment Instruments). Prepaid Payment Instrumentation (PPI) costs should be applied to all merchant UPI (Unified Payment Interface) transactions starting on April 1st, according to the National Payments Corporation of India. According to reports, the recommendation was already made public through a recent circular. And the NPCI will evaluate the fees on or before September 30th, 2023. Online wallets like Amazon Pay, pre-paid gift cards, etc. are examples of prepaid payment instruments.
Below is a breakdown of when free UPI payments will end.
Even though the maximum transaction fee is fixed at 1.1 percent, not all transactions over Rs 2,000 would be assessed the same fee. Interchange is being introduced at a rate of between 0.5 and 1.1 percent. Users will pay 0.5% for UPI transactions conducted for gasoline purchases, 0.75% for telecom, utilities/post office, education, and agriculture, 0.95% for supermarkets, and 1% for mutual funds, the government, insurance, and railways.
For loading transaction values
that is higher than the predetermined limit, the PPI issuer must pay the remitter bank 15 bps as an enhanced wallet loading service fee (Rs 2,000). Peer-to-peer and peer-to-merchant transactions between a bank account and a PPI wallet, however, won’t be subject to the penalty.
These fees had been eagerly anticipated
by payment providers because there were expenses associated with delivering the services. It had previously been provided without charge, according to an industry expert who likes to remain anonymous. The merchant discount rate (MDR). It is a fee for processing debit and credit card transactions and is not imposed by UPI itself. For each transaction of Rs 800, UPI charges a fee of Rs 2. On the other hand, the retailers who sell things with ticket prices exceeding Rs 2,000 won’t be pleased. And these fees will eventually be passed on to the final consumer.
The newly announced structure will be the standard for UPI transactions
done in India until the new structure is reviewed by the NPCI. As was previously mentioned, on or before September 30th of this year.
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