The National Payments Corporation of India (NPCI) recently issued a circular stating that users would have to pay a fee of 1.1% of the transaction value if they make transactions over Rs 2000 on UPI using Prepaid Payment Instruments (PPIs) starting from 1st April 2023. However, NPCI has now clarified that these interchange charges are only applicable for PPI merchant transactions and that customers will not be charged for bank account-to-bank account-based UPI payments. This is good news for customers who rely on UPI for their digital transactions, as they will not be subject to any additional fees.
NPCI also added that with this new addition to UPI, customers will now have the flexibility to use any bank account, RuPay credit card, or prepaid wallet on UPI-enabled apps. This is a significant development as it will provide customers with greater choice and convenience while conducting their transactions.
Furthermore, NPCI emphasized that UPI has become the preferred mode of digital payment due to its fast, secure, and seamless experience. Traditionally, customers have preferred to link their bank account to any UPI-enabled app for making payments, which constitutes over 99.9% of total UPI transactions. Bank account-to-account transactions on UPI-enabled apps remain free for both customers and merchants, and this will continue to be the case even with the new addition of PPIs to the UPI ecosystem.
In summary, NPCI’s clarification that the new charges only apply to PPI merchant transactions and not to customers is a relief for those who rely on UPI for their digital transactions. Additionally, the addition of PPIs to UPI will provide customers with greater flexibility and choice while conducting their transactions.
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