NPCI Imposes Interchange Fee on UPI Transactions Above Rs. 2,000 Made Through PPIs
The National Payments Corporation of India (NPCI) recently recommended an interchange fee on Unified Payments Interface (UPI) transactions of over Rs. 2,000 made through Prepaid Payment Instruments (PPIs). The move is aimed at increasing revenue for banks and payment service providers who have been struggling with the high cost of UPI transactions.
However, it’s important to note that the fee of 1.1% will not be charged on all UPI payments, but only on payments of Rs. 2,000 or higher made from digital wallets to UPI IDs. This clarification was made by NPCI after an earlier version of the story circulated, which said that the fee would be charged on all UPI transactions above Rs. 2,000.
The interchange pricing will come into effect from April 1, 2023, and will be reviewed by September 30, 2023. It is expected to help reduce the load on the UPI infrastructure, which has been facing unprecedented growth in recent years.
It’s worth noting that the move has garnered mixed reactions from the industry. While some experts believe that the interchange fee will help in the sustainability of the UPI ecosystem, others are concerned that it may discourage users from making larger transactions, which could impact the growth of the digital payments industry