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The NPCI has suggested 'Prepaid Payment Instruments (PPI); fees on merchant transactions on Unified Payments Interface
PremiumThe National Payments Corporation of India (NPCI) has issued a circular in which it suggested "Prepaid Payment Instruments (PPI)" fees on merchant transactions on Unified Payments Interface (UPI).
The governing body of the UPI payment system added that the PPI fees would be levied on transactions above ₹2,000 on UPI. It will result in an interchange at 1.1% of the transaction value.
However, the NPCI has clairified that there will be zero charges for the bank account to bank account-based UPI payments or normal UPI payments.
With this addition to UPI, the customers will have the choice of using any bank account, RuPay Credit card and prepaid wallets on UPI-enabled apps, it said.
The interchange fee is levied to cover the costs of accepting, processing, and authorising transactions. This is likely to make the transaction costlier. The new rule will be implemented from 1 April.
No charges will be paid by the cutomers, Paytm added. Taking to Twitter, then digital payment app wrote, “Please be informed that Paytm UPI is free, fast, secure, and seamless. No customer will pay any charges on making payments from UPI either from bank account or PPI/Paytm Wallet".
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, the circular said.
Notably, the fee will not be applicable to person-to-person transactions or person-to-merchant transactions between a bank and the prepaid wallet.
NPCI will review the stated pricing on or before 30 September
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