DNA Verified: No charges for customers in UPI transactions, only 1.1 percent interchange fee for PPI transactions

The National Payment Corporation of India (NPCI) has taken to Twitter to clarify that customers will not be charged for UPI transactions. However, interchange fees of 1.1 per cent will be applicable for Prepaid Payment Instruments (PPI) such as wallets and credit cards. In contrast, bank account-to-bank account UPI payments will remain free for customers and merchants. The NPCI’s tweet also stated that customers would now have the choice of using any bank accounts, Rupay Credit card, and prepaid wallets on UPI-enabled apps.

UPI due to its free, quick, safe, and seamless experience has emerged as the preferred digital payment option. Linking a bank account in any UPI-enabled app is the most common method of UPI transactions, accounting for over 99.9 per cent of total UPI transactions. These bank account-to-account transactions remain free for customers and merchants.

Recent regulatory guidelines have allowed PPI wallets to be part of the interoperable UPI ecosystem. In response, the NPCI has permitted PPI wallets to be part of the UPI ecosystem, with interchange charges only applicable for PPI merchant transactions. The NPCI has reiterated that there will be no charges to customers for using UPI, and bank account-to-bank account UPI payments will continue to be free.

The NPCI’s clarification provides reassurance to customers that UPI remains a free and accessible method of digital payment. With the addition of PPI wallets to the UPI ecosystem, customers now have more options to make payments using any bank account, Rupay Credit card, and prepaid wallets on UPI-enabled apps.

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