The Nationwide Funds Company of India (NPCI) has notified that an interchange payment of as much as 1.1 per cent shall be relevant on service provider UPI (Unified Funds Interface) transactions from April 1.
In a latest round, the NPCI mentioned that utilizing Pay as you go Cost Devices (PPIs) for transactions via UPI will entice an interchange payment. The fees shall be levied if the transaction is greater than Rs 2,000.
The interchange payment varies for the totally different classes of retailers. It ranges from 0.5% to 1.1% and a cap can be relevant in sure classes.
In a notification issued at the moment, NPCI mentioned that the launched payment is simply relevant for service provider transactions made via pay as you go fee devices. The funds physique clarified that no fees shall be levied on regular UPI funds which it termed as “financial institution account- to-bank account based mostly UPI funds.”
For telecom, training, and utilities/publish workplace, the interchange payment is 0.7% whereas for supermarkets the payment is 0.9% of the transaction worth. 1% fees shall be levied for insurance coverage, authorities, mutual funds, and railways, 0.5% for gasoline, and 0.7 for agriculture, reported CNBC TV-18.
The fees shall be relevant from April 1.
Interchange won’t be utilized within the case of peer-to-peer (P2P) and peer-to-peer-merchant (P2PM) transactions. PPP issuers shall be required to pay 15 foundation factors (bps) to the remitter financial institution as a wallet-loading cost for transactions of over Rs 2,000.
The pricing shall be reviewed by the NPCI on or earlier than September 30, 2023.
In August final 12 months, the Finance Ministry said that UPI is a digital public good and that it was not contemplating levying any fees on transactions made via it. “UPI is a digital public good with immense comfort for the general public & productiveness beneficial properties for the financial system. There isn’t any consideration in Govt to levy any fees for UPI companies. The issues of the service suppliers for value restoration need to be met via different means,” the ministry tweeted.
The assertion had come after the RBI issued a dialogue paper that mentioned that UPI as a fund switch system is like IMPS (Fast Cost Service) and therefore it may very well be argued that fees in UPI may very well be just like these levied on IMPS fund transfers.