PPI Merchant UPI Transactions over Rs.2000 now have charges! Explained
UPI has been creating waves in the digital payments space. Since its launch in 2016, UPI has been successful to garner a large market share of the payments market in India. Reportedly, UPI enabled over 2000 transactions every second in the year 2022. However, despite such tremendous demand and development, UPI transactions were always free until now. National Payments Corporation of India (NPCI) has announced that UPI transactions above Rs.2000 will now apply charges of 1.1% from April 1st, 2023. Below is a list of Prepaid Payments Interface (PPI) and their UPI Charges.
Unified Payments Interface (UPI) will soon cease to be free as NPCI has now announced charges to levy on UPI transactions above Rs.2000 for all online merchants, large merchants, and small offline merchants. These UPI charges will come into effect starting from April 1st, 2023 and the National Payments Corporation of India will review these new UPI charges by September 30th this year.
The introduction of interchange is in the range of 0.5% to 1.1% and the following are the charges and fees on different types of prepaid payments. Here is a list of Types of UPI Payments and their UPI Charges.
Payment Type (Prepaid) |
UPI charges & fee from April 1st 2023 |
Telecom |
0.7% |
Utilities, Post Office |
0.7% |
Education |
0.7% |
Agriculture |
0.7% |
Fuel Purchases |
0.5% |
Supermarket |
0.9% |
Mutual Funds |
1% |
Government |
1% |
Railways |
1% |
The good news is that not all UPI transactions levy charges. Only select prepaid UPI transactions will have charges. As per NPCI, the UPI transaction fees will be levied only on PPI merchant transactions. Peer-to-Peer transactions (P2P), and Peer to Merchant (P2M) (between a bank account and a PPI wallet) are exempted from charges.
Commenting on the same, NPCI said the following:
“The PPI issuer will have to pay 15 basis points as an advanced wallet loading service charge to the remitter bank for loading transaction values that are greater than the said amount (Rs 2,000), but an interchange won’t be applicable in terms of peer-to-peer (P2P) and peer-to-merchant (P2M) transactions between a bank account and a PPI wallet.”
UPI recently launched UPI Lite to disrupt the offline payments market in India and is expanding the service to other foreign countries including the US, Singapore, Australia, Canada, and others. There’s no doubt, that UPI has done significant progress in a concise period of time. It’s been a long debate about whether UPI should levy charges or not since while we consumers were exempted from the charges, banks had to bear crores of cost each year for allowing the service.
NPCI has finally passed a circular stating that from April 1st, UPI transactions will have an interchange at a rate of up to 1.1% (maximum upper limit)
Thanks to @abhishek012 for also sharing this news with us. You can check out the thread to read the views of our dimers and community - NPCI Recommends UPI fees and charges above Rs.2000.
What are your thoughts on this? Do let us know below!
2
No Nagesh, there won't be any additional UPI fee if it's a peer-to-peer transaction or even peer to the merchant. These charges are only applicable on merchant transactions (M2M or Business to Business) currently*
Basically, indian banking/transaction system will be full of charges one day, once they know all our money is with banks
Better withdraw slowly and keep with you and make banks beggers again before they do us so.
65% money with banks is common mans deposits is what i read recently.
Thanks for the information vu
So, recently NPCI made a tweet saying that UPI Charges are free of cost for the customers and if someone says otherwise, its a fake news.
If you read the complete article sir, I have nowhere mentioned that UPI transactions are charged. I have clearly tried to mention that it's the merchant UPI transactions that would be charged (which is also confirmed in the tweet of official NPCI - attached below)
So yes its a fake news if someone says normal UPI transactions are charged But its not fake news/rumors that PPI merchant UPI transactions are going to be charged.
Source: https://twitter.com/NPCI_NPCI/status/1640964585...
PS: Have edited the title a bit to clear any further confusion
Thanks a lot for sharing this @ xedo123. I read the tweet and yes the article talks pretty much the same thing as in the tweet. It is only PPI Merchant transactions that will levy charges and not normal UPI transactions.
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