UPI transactions over Rs 2,000 to be charged at 1.1 percent from April 1st

UPI payments will soon cease to remain free, here’s the breakdown

While the upper limit of the transaction charges has been set to 1.1%, not every transaction above Rs 2,000 will be charged with the same percentage. The introduction of interchange is in the range of 0.5% to 1.1 percent. For instance, users will be charged 0.5 percent for UPI transactions made for fuel purchase, 0.7% for telecom, utilities/post office, education, and agriculture, 0.9% for supermarket, and 1% for mutual funds, government, insurance, and railways.

The PPI issuer will have to pay 15 bps as an advanced wallet loading service charge to the remitter bank for loading transaction values that are greater than the said amount (Rs 2,000), but an interchange won’t be applicable in terms of peer-to-peer (P2P) and peer-to-merchant (P2M) transactions between a bank account and a PPI wallet.

According to an industry expert, who prefers to stay anonymous, these charged had been much awaited by payment providers, because there were costs involved in providing the services, which were free of cost up until now. The merchants with ticket items above Rs 2,000, on the other hand, will not be happy, and in one way or the other, these charges will be passed to the end customer.

As mentioned earlier, the new structure will be reviewed by the NPCI on or before September 30th this year, but till then, the newly introduced structure will be the norm for UPI transactions made in India.