In its latest circular, the National Payments Corporation of India (NPCI) announced that it will start charging “Prepaid Payment Instruments (PPI)” fees on merchant transactions on Unified Payments Interface (UPI) starting April 1. The governing body said that the PPI fees would be levied on transactions above ₹2,000 on UPI payments done via GPay, Paytm and other apps. It will result in an interchange at 1.1% of the transaction value.
Within hours of the announcement, miscreants have started spreading rumours about UPI app users being charged for making online payments. Now, Paytm Payments Bank, in a Twitter post has clarified that the interchange fees will not be applicable on customers. This means that consumers will not be required to pay any extra charge on making payments from UPI either via bank account or Paytm wallet.
“Regarding NPCI circular on interchange fees & wallet interoperability, no customer will pay any charges on making payments from #UPI either from bank account or PPI/Paytm Wallet. Please do not spread misinformation. #Mobile payments will continue to drive our economy forward!” read the post shared by the official Twitter handle of Paytm Payments Bank.
In its circular, NPCI said that the fees will not be applicable to person-to-person transactions or person-to-merchant transactions between a bank and the prepaid wallet. The interchange fee is levied to cover the costs of accepting, processing, and authorising transactions. This is likely to make the transaction costlier. The new rule will be implemented from 1 April.
The issuer of prepaid instruments will also be required to pay 15 basis points of the fee to the remitter bank for loading a transaction value above ₹2,000, the circular said.
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