UPI transactions free for customers, clarifies NPCI

New Delhi: The National Payments Corporation of India (NPCI) on Wednesday clarified that bank account-to-account transactions made through the Unified Payments Interface (UPI) continue to be free for both customers and merchants. Traditionally, the most preferred method of UPI transactions is linking the bank account in any UPI-enabled app for making payments which contributes over 99.9% of total UPI transactions, NPCI said in a statement. 

"These bank account-to-account transactions continue to remain free for customers and merchants," the payments body said. Every month, over 8 billion transactions are processed free for customers and merchants using bank accounts.

The clarification comes after NPCI notified that an interchange fee of up to 1.1% will be applicable on merchant UPI transactions made using prepaid payment instruments (PPIs) — wallets or cards — with effect from April 1. These charges will be levied if the transaction is over Rs 2,000. Fuel stations will be eligible for an interchange fee of 0.5%.

"Prepaid Payment Instruments (PPI Wallets) have been permitted to be part of interoperable UPI ecosystem. In view of this NPCI has now permitted the PPI wallets to be part of interoperable UPI ecosystem.

The interchange charges introduced are only applicable for the PPI merchant transactions and there is no charge to customers, and it is further clarified that there are no charges for the bank account to bank account-based UPI payments (i.e. normal UPI payments)," NPCI said in its clarification.

With this addition to UPI, customers will have the choice of using any bank accounts, RuPay Credit Card and prepaid wallets on UPI enabled apps, NPCI said.