The NPCI (National Payments Corporation of India) has confirmed that customers will not have to pay any fees when they transfer regular amounts of money or when they make payments to merchants through the Unified Payments Interface (UPI).
What Happened? NPCI issued a circular on Wednesday after rumours began travelling thick and fast that from April 1, 2023, a fee would be charged for all UPI transactions over ₹2,000. The NPCI has clarified that this is not true.
The retail payment body has announced that starting April 1, 2023, they will impose an interchange fee of up to 1.1% on transactions exceeding ₹2,000 made through prepaid payment instruments (PPI) such as online wallets or pre-loaded gift cards. This fee is associated with card payments and covers the expenses incurred in accepting, processing, and authorizing transactions.
In the case of credit cards, merchants may bear the costs of transactions, which they will distribute to various payment stakeholders. As a result, customers may or may not be charged for the transactions.
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Why The Change? The addition of this feature to UPI will give customers the option to use any bank account, RuPay Credit card, and prepaid wallet on UPI-enabled apps.
Since merchants often use wallets at point-of-sales (PoS) systems to accept payments from customers, interoperability will greatly simplify payment collection for them by letting them accept wallet payments from customers using any wallet.
The decision will also generate much-needed revenue for payment service providers who have been finding it difficult to maintain profitability because of the low transaction fees on UPI transactions.
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