Reports suggest that the National Payments Corporation of India (NPCI) has made a significant decision that could impact consumers using prepaid payment instruments (PPI) such as mobile wallets like Google Pay, PayTM, and similar applications in New Delhi. Effective April 1, the NPCI has set an interchange fee of 1.1% for merchant transactions initiated on the Unified Payments Interface (UPI) network. As per an NPCI circular dated March 24, users who make payments to merchants on the UPI network via wallets will have to bear the additional fees.
As per the circular cited by multiple media reports, transactions valued above Rs 2,000 will be subject to a surcharge of 1.1%. This surcharge has been set by NPCI, the regulatory body responsible for digital payments in the country. Moreover, the governing body has established distinct merchant fee structures for PPI payments on UPI, based on the various industries they cater to.
As per the NPCI circular cited by Economic Times, the interchange fee will not be applicable for P2P (peer to peer) and P2M (peer to merchant) transactions between a bank account and a PPI wallet. However, the circular has not been made available to the public yet. These changes will come into effect when users use UPI to load their wallets for amounts exceeding Rs 2,000. Furthermore, the issuer of the PPI will be required to pay a wallet-loading service charge of 15 bps (basis points) to the account holder’s bank for transactions above Rs 2,000, in accordance with the NPCI directive.
