The National Payments Corporation of India (NPCI) has clarified its fee structure for UPI transactions, relieving millions of users who rely heavily on UPI for daily transactions. According to the clarification, bank account-to-bank account-based UPI payments or regular UPI payments will not be charged any fees. However, interchange charges will be applicable for prepaid payment instruments (PPI) merchant transactions.
The NPCI has allowed PPI wallets to be part of the interoperable UPI ecosystem, with a 1.1% charge being levied on UPI transactions above Rs. 2,000 when using PPI. This fee structure will vary for fuel, agriculture, education, and telecom needs, with lower fees ranging from 0.5% to 0.7%. However, this fee will not be charged to users for P2P (peer-to-peer) and P2M (peer-to-merchant) transactions.
Traditionally, linking a bank account in any UPI-enabled app for making payments is the most preferred method of UPI transactions. This accounts for over 99.9% of total UPI transactions. The new fee structure will only affect PPI merchant transactions and not regular UPI payments, providing much-needed relief to users relying heavily on UPI for daily transactions.
This move by NPCI is an excellent step towards enhancing UPI’s interoperability and providing users with more choices. Customers can now use any bank account, RuPay Credit card, or prepaid wallet on UPI-enabled apps. UPI has become the preferred digital payment mode by offering a free, fast, secure, and seamless experience.
In conclusion, the NPCI’s decision to clarify its fee structure for UPI transactions is a welcome move that will benefit millions of users who rely on UPI for their daily transactions. With this step, the NPCI has made UPI more interoperable and provided more choices to users. The service charges levied on PPI merchant transactions will not be charged to users, encouraging more people to adopt UPI as their preferred digital payment mode.
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