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UPI Payment of more than Rs.2000 to draw up to 1% charges

The National Payments Corporation of India (NPCI) has announced that starting April 1, an interchange cost of as much as 1.1% can be levied on retailer UPI (Unified Payments Interface) transactions made utilizing prepaid payment instruments (PPIs)-wallets or cards.

The price can be utilised for UPI purchases of greater than Rs.2,000 to online retailers, huge retailers, and small physical shops. However, relying on the related limits, a decrease in interchange rate beginning at 0.5% could also be imposed on sure service provider teams, in line with NPCI.

P2P and P2PM transfers between bank accounts and PPI purses are not going to be eligible for trade. However, PPI producers should pay the remitter bank 15 basis points as a “wallet loading service charge” for placing greater than 2,000 within the pay-as-you-go wallet.

According to the NPCI circular, this interchange fee can be revised by September 30, 2023.

“Based on February 2023 annualized wallet payment transactions of 2 lakh crore, we estimate wallet loading charges could be over 100 crores across all wallet issuers (assuming 30% of wallet transactions are eligible given transaction-size rule and an estimated 60% share of UPI in wallet-loading) and will be paid to banks,” Citi Research stated in a be aware.

Additional Revenue

Paytm Payments Bank, India’s biggest KYC wallet provider with over 10 crore customers, introduced that its wallets can be accepted on all UPI QRs and online retailers, with compatibility enabled. Additionally, it would make additional interchange income on Paytm pocket transfers to retailers bought by different fee service suppliers, fee processors, and fee brokers.

“The bank will pay 15 basis points for adding more than 2,000 and will earn 15 basis points when any other wallets use the bank to add more than 2,000 using UPI,” it stated.

NPCI also requested UPI service suppliers and retailers’ final week to enhance interoperability by clearly and conspicuously displaying the UPI fee selection by September 30, 2023.

Interoperability of wallets with UPI is predicted to develop the scope, position, appeal, and use cases of wallets, which might now be used on around 25 crore QR codes by February 2023, in line with industry experts, including that it’s going to additionally enhance fee choices for patrons, as they may be capable of pay by way of UPI or cards.

“Many merchants, for example, at point-of-sale, use wallets to accept customer payments.” Interoperability will make collections a lot simpler for them as a result of it would allow retailers to take pocket payments regardless of the pockets utilized by the consumer,” said Akash Sinha, Co-founder and CEO of Cash free Payments.