The National Payments Corporation of India (NPCI) has issued a circular wherein it is suggested "Prepaid Payment Instruments (PPI)" surcharges on merchant transactions on Unified Payments Interface (UPI).
The overseers of the Unified Payments Interface payment system further stated that Prepaid Payment Instruments costs would be charged on UPI transactions over Rs. 2,000. There will be an interchange at the rate of 1.1% of the transaction's value.
The interchange charge is assessed to defray the costs associated with transaction authorization, processing, and acceptance. This will probably increase the price of the transaction. The new regulation will go into effect on April 1. According to the circular, the issuer of prepaid instruments will also be compelled to give the remitter bank 15 basis points of the cost for loading transactions worth more than Rs. 2,000. Note, the fee will not be charged for transactions between a bank and the prepaid wallet made between individuals or between individuals and merchants.
National Payments Corporation of India will review the stated pricing on or before 30 September 2023, the circular said.
What is UPI: The National Payments Corporation of India and the Reserve Bank of India joined hands to facilitate the transfer of funds from one bank account to another. Thus, came in UPI-unified Payments Interface. UPI is a single platform that permits its users to make all types of bank-related transactions through their mobile devices, at the comfort of their homes.
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