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UPI CHARGES?

UPI CHARGES?

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From buying daily groceries for households to making business payments, it is UPI that we are depending on. Unified Payment Interface (UPI) is always taken as the first option on top of other payment methods because it offers smooth transactions without any additional charges.

But now we see that some changes are made in terms of UPI transactions and charges applied to them.

People on UPI who are using prepaid wallets like Paytm, Amazon, and others can make wallet-to-wallet transactions by using a QR code or UPI handle.

National Payments Corporation of India has stated that UPI transactions from prepaid wallets will be charged 1.1% of the amount every 2000. This will come into action from April 1, 2023.

 According to an NPCI circular that was passed on March 24, 2023, the 1.1 percent interchange fee will be charged only on merchant payments of more than Rs 2,000, if less, there will be no fee.

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An advantage of this circular is that previously wallet to wallet transactions was not possible/successful, but now wallet-to-wallet transactions can also be made.

According to what we heard from the NPCI, this exchange fee will not apply to peer-to-peer (P2P) or peer-to-peer-merchant (P2PM) transactions between a bank and a prepaid wallet.

So that means transactions that you make in your daily life like to friends or family members or to small merchants won’t be charged the 1.1% fee that NPCI is talking about.

Transactions made with prepaid wallets like vouchers, wallets, and smart cards are what will fall under the 1.1% charge.

This interchange fee is usually paid by the merchant to whom the payment is done. The merchant who received the money through any UPI payment will have to pay the interchange fee to the payment company through which the payment happened.

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This fee, which is to be paid will be somewhere between 0.5% to 1.1% and varies from merchant to merchant depending upon the codes that are given by NPCI to them.

This decision will favor the online payment services that haven’t been reaching their expected profits due to very low interchange fees.

In order to reload a wallet with more than rs2000, NPCI has mandated that prepaid payment instrument providers pay a wallet-loading service fee to the remitter bank of 15 basis points.

But for now, no additional charge is to be paid to recharge your UPI wallet, still, if this 15-basis points idea will be put forward by the service issuer, then an amount of additional charge might be added to recharge your wallet.

Any change in this will be announced as soon as heard. But for now, common people and their day-to-day payments are not that affected by the UPI charges.

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