UPI Merchant payments over ₹ 2,000 to attract fee, no charge to customers

New Delhi, March 29

The National Payments Corporation of India (NPCI) has notified that an interchange fee of up to 1.1 per cent will be applicable on merchant UPI (Unified Payments Interface) transactions from April 1.

In a recent circular, the NPCI said that using Prepaid Payment Instruments (PPIs) for transactions through UPI will attract an interchange fee. The charges will be levied if the transaction is more than ₹ 2,000.

The interchange fee varies for the different categories of merchants. It ranges from 0.5% to 1.1% and a cap is also applicable in certain categories.

In a notification issued today, NPCI said that the introduced fee is only applicable for merchant transactions made through prepaid payment instruments. The payments body clarified that no charges will be levied on normal UPI payments which it termed as “bank account- to-bank account based UPI payments.”

For telecom, education, and utilities/post office, the interchange fee is 0.7% while for supermarkets the fee is 0.9% of the transaction value. 1% charges will be levied for insurance, government, mutual funds, and railways, 0.5% for fuel, and 0.7 for agriculture.