Image has been used for representational purpose only. , photo credit: Kamal Narang
From April 1, merchant transactions above ₹2,000 in value done using prepaid payment instruments (PPI wallets) on UPI will attract an interchange fee of 1.1%. However, the National Payments Corporation of India (NPCI), which regulates UPI, said in a statement on Wednesday, “The new interchange charges are applicable only for PPI merchant transactions and there are no charges for customers.”
“It is further clarified that there are no charges for bank account to bank account based UPI payments (i.e. normal UPI payments),” NPCI said.
An interchange fee is usually attached to card payments to cover transaction costs.
In the statement, NCPI said that as per the recent regulatory guidelines, PPI wallets were permitted to become part of the interoperable UPI ecosystem.
In a statement, Rajashree Rangan, India head of development, banking and payments at FIS, said, “The new interoperability guidelines for prepaid payment instruments announced by NPCI is a significant step towards creating a more inclusive and seamless digital payments ecosystem in India. “
“The interoperability of digital wallets and UPI could be a game-changer for the Indian fintech industry, as it opens up new opportunities for innovation, growth and competition. With greater interoperability between payment systems, consumers will have more choice and flexibility in the way they transact with merchants, thereby increasing the adoption of digital payments and ultimately driving financial inclusion and economic growth,” said Ms. Rengan. .
“This step will encourage innovation in the field of digital payments, promote competition and improve the quality of services offered to consumers,” he added.
“We believe this is a positive development for the Indian economy and the banking system as a whole, and we look forward to continuing to support the growth and development of digital payments in India,” Ms. Rengan said.