Explained | Will consumers now have to pay for transactions made …

The story so far: Earlier last week, the National Payments Corporation of India (NPCI), which governs UPI, in a circular issued directly to banks, intimated that they can now levy charges on merchant transactions made through Prepaid Instrument wallets using UPI. After the information was leaked to the media, the NPCI issued a clarification stating that normal bank-to-bank UPI transactions will not be charged and that customers will not have to pay for transactions made via PPI on UPI. It said that the new interchange charges are only applicable for Prepaid Payment Instruments’ (PPI) merchant transactions.

The interchange fee, generally associated with card payments to cover the transaction cost, has now brought PPI wallets also under its fold.

What are PPIs?

Prepaid Payment Instruments (PPIs) are payment methods that can be used to purchase goods and services and send/receive money by using the stored value in the wallet. Users have to pre-load the wallet with a desired amount. The amount can be loaded/reloaded against cash or through debit to bank account, or by using credit/debit cards, UPI, or any other approved payment method in India.

PPIs can only be used in Indian rupees. PPIs can be in the form of mobile wallets, physical smart cards, secure tokens, vouchers, or any other method that allows access to prepaid funds.

What is PPI interoperability?

Previously, to use PPI at any merchant, it was necessary that the concerned merchant was engaged directly by the specific PPI issuer (specific network). All PPIs with which the merchant did not have a direct tie-up would get rejected.

The most prevalent form of PPI used in the country is the mobile wallet, and this restriction meant that customers of one specific mobile wallet could spend the money in the wallet only at specific merchant locations which were directly tied up with the same PPI wallet provider. For example, if you had a Paytm or Mobikwik wallet, you could only use it at merchants that accepted Paytm or Mobikwik QR codes. To overcome this limitation of PPIs, the RBI has mandated interoperability among different PPI issuers.

Subsequently, PPI issuers tied-up with NPCI for issuing (a) interoperable RuPay PPI cards or (b) creating interoperable wallets on UPI rails. Prepaid instruments in the form of wallets can now be linked to UPI, thus creating interoperable wallets on UPI rails.

How does PPI interoperability through UPI work?

After linking one’s PPI wallet to UPI, customers can transact using Scan and Pay on all UPI interoperable QR codes. This will enable the use of PPI wallets at all merchant locations.

The user can also send/receive money to any other wallet user. Similarly, a merchant with any UPI QR code can now accept payments from any PPI issuer or mobile wallet. PPI on UPI will speed up the growth of merchant transactions in rural areas and further deepen digital financial inclusion by catering to use cases such as healthcare, transit, education, utility bills, etc.

Do merchants have to pay for accepting wallet transaction on UPI?

The PPI enabled merchants were already paying charges to the PPI issuer for acceptance of mobile wallets or prepaid cards.

Now the charges are aligned at a network level with some standardisation. However, each merchant can work with their preferred acquiring entity. Now, for using prepaid payment instruments (PPIs) such as gift cards, wallets etc for transactions on UPI, an interchange fee of up to 1.1% has been levied from April 1, 2023.

The charges are applicable if the transaction is more than INR2,000. If you are a merchant and accepting UPI payments from a customer’s bank account, then there are no charges applicable. Charges are applicable only if you have accepted or consented for the transactions made using PPI Wallet.

Are there any charges to be paid by consumers holding wallets for PPI on UPI transactions?

Officially there are no charges to be paid by the customer.

However, merchants may pass on the additional burden to customers by way of price increase or some other means.

COMMents

SHARE

  • Copy link
  • Email
  • Facebook
  • Twitter
  • Telegram
  • LinkedIn
  • WhatsApp
  • Reddit

Tags:

castore listed on couponmatrix.ukcharles-tyrwhitt listed on couponmatrix.ukchemist4u listed on couponmatrix.ukcosyfeet listed on couponmatrix.ukeleonora-bonucci listed on couponmatrix.ukoxfam-online-shop listed on couponmatrix.uk
castore listed on couponmatrix.ukWhen you’re ready to reach beyond what you thought possible in terms of personal fitness, you’ll want Castore sportswear to help you there. Sporting a sweat-wicking array of breathable clothing to keep customers going the extra mile, any dedicated athlete needs only a Castore discount code to add dependable gear to their fitness wardrobe for less. With an ever-growing catalogue of men and women’s clothing alongside loungewear, accessories and running shoes, Castore has all any fitness enthusiast requires.
charles-tyrwhitt listed on couponmatrix.ukIf your wardrobe is in need of a top-class makeover to set you apart as a stylish man about town then Charles Tyrwhitt is the fashion brand for you! Offering not just the best in style but also the best in quality, Charles Tyrwhitt offers long lasting shirts, separates, suits and even shoes for the suave and sophisticated gentleman. Don’t forget to use a Charles Tyrwhitt discount code from us when you pay your bill and you could rake in the savings while serving new looks.
chemist4u listed on couponmatrix.ukPut your personal health in the best aid the web can offer with Chemist4u, an online-based pharmacist with an aim to help cut costs, time and hassle out of everyone’s healthcare routine. Backed by a healthy selection of vitamins, supplements, skincare, baby goods and more, a Chemist4u promo code can help stack up savings on an array of everyday essentials you know and need.
cosyfeet listed on couponmatrix.ukIf regular sized shoes and socks leave your toes feeling cramped, turn to the footwear experts at Cosyfeet for the roomiest shoes in town! Score a Cosyfeet discount code from us to cut the cost of comfortable footwear, and whether you need sandals with extra-girth or trainers with extra-depth, you won’t have to break the bank. With a range of stylish designs suitable for men and women alike, you can stay mobile and say goodbye to foot pain with Cosyfeet by your side.
eleonora-bonucci listed on couponmatrix.ukLooking for an Eleonora Bonucci promo code? You've come to the right place! Check out our exclusive deals and discounts on all your favourite Eleonora Bonucci fashion, beauty and home products. Whether you're looking for a new outfit or just some stylish accessories, we've got you covered. There’s a wide range of products, from incredible high quality tops to different scents of perfumes, so browse our selection and take advantage of our great deals today! At Groupon, we know that saving money is important to our customers and latest trends can get expensive. That's why we work hard to find the best Eleonora Bonucci promo codes and discounts codes, so you can shop for your favourite products without breaking the bank. Whether you're looking for a new outfit, home accessories or just some stylish footwear, we've got you covered. So what are you waiting for? Happy shopping! Our top-performing Eleonora Bonucci products is their clothing range. From the most beautiful coats for winter to colourful and fun swimwear for summer in a variety of different styles and colours, you’re guaranteed to get the most stylish pieces for every season. So what are you waiting for? Look stylish no matter the weather and order your best quality pieces today. And with our Eleonora Bonucci discount code, you can save even more.
oxfam-online-shop listed on couponmatrix.ukCharity shopping is a great way to save money on some gorgeous clothes, shoes, books, CDs, and so much more, whilst feeling good about yourself for contributing to some amazing causes. Now, thanks to Oxfam Online, you can enjoy all the benefits of charity shopping from the comfort of your own home. With your Oxfam discount code at the ready, you can find all the products you would expect in your local Oxfam shop for even less, so you can bag a great deal and contribute to charity at the same time!