UPI payments through bank accounts continue to be free for merchants and customers while only the Prepaid Payment Instruments (PPI) wallet merchant transactions are chargeable, said National Payments Council of India in a statement on Tuesday.
"The Prepaid Payment Instruments (PPI wallets) have been permitted to be part of interoperable UPI ecosystem. And the interchange charges are applicable only for the PPI merchant transactions," said the statement.
Prepaid Wallets are financial instruments that help in the transfer of money in digital form. As per RBI's list of authorised prepaid wallets there are more than 50 including the likes of PhonePe, AmazonPay and Bajaj Finance.
The NPCI has set an interchange fee at 1.1 percent for merchant transactions initiated through PPI wallets on the Unified Payments Interface (UPI) network with effect from April 1.
This comes as a clarification after several citizens took it to social media and said that UPI is chargeable.
NPCI's chief executive officer Dilip Asbe wrote on Twitter that there is no change in any charges regarding UPI payments from bank accounts.
"No change in any charges regarding UPI payments from bank accounts. UPI continues to be free for Customers and Merchants for making payments from any bank account," he wrote.
Further clarifying at the News18’s Rising India Summit, NPCI chief Asbe said that a ‘customer’ never pays in any UPI transaction as per the government’s notification.
“There are two entities taking part in the UPI transaction, one is the customer and then the merchant. There is obviously the Person to Merchant or Person to Person transaction in UPI. One thing is very that a customer never pays in any of these transactions. Only the merchant as a user of the payment system will pay a nominal fee for the payment system,” Asbe said during a session on Wednesday.
UPI for the bank account is always free with the government notification and again if there is a review the government will have to decide, Asbe added.
“The notification we issued was only to the prepaid wallets as these wallets as per RBI’s rules are now interoperable and while they were already operating on the cards they were not permitted to operate on UPI and in order to permit them an interchange fee was levied and here as well only the merchant pays not the customer,” he said.
Founder of PayTM Vijay Shekhar Sharma too wrote on Twitter clearing the air around UPI's chargeablity.
"UPI payments from Bank account or Wallets are totally free ! #UPIcharges are NIL for consumers. Do not fall for malicious rumours," he wrote.
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