UPI payment charges explained: Know charges for account to account, account to merchant transactions

The new announcement by the National Payments Corporation of India (NPCI) caused a lot of confusion among those who rely on Unified Payments Interface (UPI) transactions for their daily payments. The confusion was regarding if UPI payments will now have a charge or not.

According to the new announcements by NPCI, those who make UPI transactions will now have to pay an additional charge. The corporation also issued a clarification on what kind of UPI transactions will now attract an intercharge, and what payments will be made free.

NPCI suggested that the most preferred way for a person to use UPI payment applications such as Google Pay, Paytm, BharatPe, and other apps is by linking their bank accounts with their UPI accounts, rather than relying on wallet payments.

After the announcement roused confusion among UPI users, the NPCI issued a clarification, “UPI is free, fast, secure, and seamless.” Meanwhile, a charge will be attached to certain type of UPI transactions. Here is all you need to know about the new rule change.

NPCI Press Release: UPI is free, fast, secure and seamless
Every month, over 8 billion transactions are processed free for customers and merchants using bank-accounts@EconomicTimes @FinancialXpress @businessline @bsindia @livemint @moneycontrolcom @timesofindia @dilipasbe pic.twitter.com/VpsdUt5u7U

— NPCI (@NPCI_NPCI) March 29, 2023

UPI payment charges explained: Know NPCI’s new rule

As per the announcement made by NPCI, the UPI payments for bank account-to-account transactions will continue to remain free for customers and merchants. This means that if you use UPI to transfer money to a bank account, there will be no charge.

Further, NPCI informed that there will be a small intercharge for Prepaid Payment Instruments (PPI). This means that customer-to-merchant transactions will have a small charge attached to them. However, this charge will not be paid by the customer but by the merchant.

UPI payments made through PPI – such as Paytm wallets and digital wallets – will now attract a fee of Rs 1.1 of the transaction is over Rs 2000. This intercharge will be charged to the merchant and not the customer. No extra charge will be there for wallet transactions under Rs 2000.

No extra charge will be levied on payments from bank accounts to bank accounts through UPI applications. One must note that when it comes to wallet transactions, the merchant can choose to transfer the Rs 1.1 fee to the customer.

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