National Payments Corporation of India, through a circular, has recommended Prepaid Payment Instrument charges for UPI payments
The National Payments Corporation of India (NPCI) has advised Prepaid Payment Instruments (PPI) fees to be applied to merchant transactions on Unified Payments Interface (UPI) beginning on April 1 in a recent circular.
| Wallet Provider | Transaction Amount | Transaction Charge |
| Paytm | Up to Rs. 2,000 | 0% (No charges) |
| Above Rs. 2,000 and up to Rs. 1 lakh | 1.75% | |
| Above Rs. 1 lakh | 2% | |
| PhonePe | Up to Rs. 2,000 | 0% (No charges) |
| Above Rs. 2,000 and up to Rs. 1 lakh | 1.75% | |
| Google Pay | Up to Rs. 2,000 | 0% (No charges) |
| Above Rs. 2,000 and up to Rs. 1 lakh | 1.75% | |
| Amazon Pay | Up to Rs. 2,000 | 0% (No charges) |
| Above Rs. 2,000 and up to Rs. 1 lakh | 1.75% | |
| Above Rs. 1 lakh | 2% |
NCPI, which is UPI’s governing body, said in the circular that for amounts over Rs 2,000, using PPIs on UPI will result in an interchange at 1.1 percent of the transaction value.
The interchange fee is typically associated with card payments and is levied to cover the costs of accepting processing and authorizing transactions.
Peer-to-peer (P2P) and peer-to-peer-merchant (P2PM) transactions between a bank account and a PPI wallet do not require an interchange, and the PPI issuer will pay the remitter bank approximately 15 basis points as a wallet-loading service charge.
The introduction of interchange is in the range of 0.5-1.1 percent, with interchange being 0.5 percent for fuel, 0.7 percent for telecom, utilities/post office, education, agriculture, 0.9 percent for supermarket, and 1 percent for a mutual fund, government, insurance, and railways.
The pricing will come into effect starting April 1, 2023. NPCI will review the stated pricing on or before Sept. 30, 2023, the circular said.
Interchange will not be applied in the case of peer-to-peer (P2P) and peer-to-peer-merchant (P2PM) transactions. PPP issuers will be required to pay 15 basis points (bps) to the remitter bank as a wallet-loading charge for transactions of over ₹ 2,000.
The pricing will be reviewed by the NPCI on or before September 30, 2023. In August last year, the Finance Ministry stated that UPI is a digital public good and that it was not considering levying any charges on transactions made through it. “UPI is a digital public good with immense convenience for the public & productivity gains for the economy. There is no consideration in Govt to levy any charges for UPI services. The concerns of the service providers for cost recovery have to be met through other means,” the ministry tweeted.