UPI Transaction Charges 2023: The National Payments Corporation of India (NCPI) has come up with an idea which is set to be implemented from 1st April 2023. In its suggestion, a 1.1% interchange fee will be deducted from the Unified Payment Interface (UPI) transaction over Rs 2000 via Prepaid Payment Instruments (PPIs). These PPIs can be digital wallets like Paytm, Google pay, Apple Pay and many more. The UPI Transaction Charges 2023 will only apply to the merchant-level transaction and not to the user level. The bank account-to-bank account transaction will not come under the NCPI UPI Charges.
As per the latest updates, the NCPI Interchange Fee 2023 aims to increase the revenue of the bank and the various payment service providers. Lately, these companies have been facing issues with the increasing cost of transactions and this move will try to resolve the growing problem. Earlier there were no charges deducted from the transaction but now with the introduction of a new suggestion, the people using the PPIs have become confused. This article will sort out all the confusion and make the users more informed.
UPI Transaction Charges 2023
The simplified explanation of the UPI Transaction Charges 2023 can be explained with the given example. Let’s say, a merchant sends Rs 2500 by using any PPI platform to another merchant then a 1.1% interchange fee will be deducted from the merchant’s account. If the same amount is sent by a consumer through the same PPI platform then no charges will be deducted from the account. If the merchant again does UPI Payments Transaction RBI 2023 via a bank account-to-bank account transfer then again no charges will be deducted. For brief information on the above updates, readers can check out the outline table provided below.
|Name of the Article||UPI New Guidelines|
|Current News||Interchange fee in the UPI Transaction|
|Implementing Authority||The National Payments Corporation of India (NCPI)|
|Implementing Date||1st April 2023|
|Brief News||Interchange fee for the merchant transaction above Rs 2000|
|Total Amount||Rs 2000 or above|
|PPIs Free Limit||Rs 2000 or below|
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What are UPI, PPI and NCPI?
The explanation of all the above abbreviations is given below:
Unified Payment Interface (UPI): It is the online payment platform which provides a system in which people can do transactions with multiple bank accounts without the IFSC Code. This transaction is done via the smartphone and makes transactions easy and reduces the cash dependence
Prepaid Payment Instruments (PPIs): These instruments are useful for the facilitation of cash withdrawals, purchases and remittances against the value stored in the account of the person. Examples of PPIs are online accounts and wallets, stripes and smart cards, paper vouchers etc.
National Payments Corporation of India (NCPI): This is the spirit of the Reserve Bank of India (RBI) and India Bank’s Association (IBA) to function the retail payments and its settlement system. Its main function is to provide routing, processing and settlement services to the UPI platform using people.
UPI Payments Transaction which Attracts the Interchange Fee 2023
There are multiple channels which will be attracting interchange fees after the implementation of the new policy by the NCPI. The UPI Payments Transaction which attracts the Interchange fee 2023 is listed below.
- Wallets: Paytm wallet, Phone pay wallet, Amazon Wallet, MobiKwik wallet, and SODEXO vouchers.
- Smart Cards
- Magnetised Chips
NCPI Interchange Fee 2023
The interchange fee is the amount which will be deducted from the merchant’s account in a transaction of more than Rs 2000. The NCPI has listed the 1.1% amount as the NCPI Interchange Fee 2023 which will be deducted from the given transaction. If a transaction of more than Rs 2000 is done on the merchant’s account by anyone, then 1.1% interchange charges will be deducted. The consumer or user will not have to worry about the interchange fees.
NPCI UPI Charges are unaffected by the New Provision 2023
The new provision will remain unaffected in a few parameters. The NCPI UPI Charges unaffected by the New Provision 2023 are listed below. If you fall for any of these categories then no interchange fee will be deducted.
- Peer-to-peer transaction (P2P): If a person is doing any transaction with another person then that transaction will not fall for the interchange fee deduction provision. These kinds of transactions are done by people in their daily life.
- Peer-to-peer-merchant transaction (P2PM): Small Businesses that have a monthly transaction of Rs 50,000 via UPI then these transitions will also remain unaffected by the interchange fees.
Benefits of the UPI Charges RBI Provision 2023
UPI Payments have become an integral part of consumers and buyers. This system has decreased the dependence on cash and has reached every corner of the country. To increase the accessibility of UPI payments, the companies have decreased the transaction charges from the system. The UPI Charges RBI Provision 2023 facility is benefitting the users but the companies are getting into loss because of decreased revenue. The suggestion of the NCPI will increase the revenue of the companies and they will be able to sail through the increasing loss.
UPI Transaction Charges 2023: Important Links
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FAQs for the UPI Transaction Charges 2023
Who will be affected by the NCPI’s new provision?
The merchant community will mostly be affected by the NCPI’s new provision.
What is the limit for the UPI Transaction Charges 2023?
Rs 2000 is the limit for the free transaction via UP.
Will consumers and regular transactions be affected by the upcoming interchange fee provision?
No, the consumers/users and regular transactions will not be affected by the upcoming interchange fee provision.
Which date is decided for the implementation of the new UPI provision?
From 1st April 2023, the new UPI Transaction Charges 2023 will be implemented.