The NPCI has suggested ‘Prepaid Payment Instruments (PPI); fees on merchant transactions on Unified Payments Interface from 1st of April 2023.
The National Payments Corporation of India (NPCI) has recently issued a circular suggesting the implementation of Prepaid Payment Instruments (PPI) fees on merchant transactions on Unified Payments Interface (UPI). The governing body of the UPI payment system has stated that these PPI fees will be charged on transactions above ₹2,000 on UPI, resulting in no charge to customers of the transaction value.
This interchange fee is intended to cover the costs of accepting, processing, and authorising transactions, but it may make transactions costlier for users. The new rule is set to be implemented from 1 April onwards.
According to the circular, the issuer of prepaid instruments will also be required to pay 15 basis points of the fee to the remitter bank for loading a transaction value above ₹2,000. It’s worth noting that this fee will not be applicable to person-to-person transactions or person-to-merchant transactions between a bank and the prepaid wallet.
It is expected that the no new surcharge will affect users of popular digital payment platforms such as Gpay and Paytm, amongst others. However, the NPCI has stated that it will review the pricing on or before 30 September, indicating that there may be changes to the surcharge or its implementation in the future.
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