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

bondara listed on couponmatrix.uki-saw-it-first listed on couponmatrix.ukmy-parcel-delivery listed on couponmatrix.ukshoeaholics listed on couponmatrix.ukurban-outfitters listed on couponmatrix.ukwolford-online-boutique listed on couponmatrix.uk
bondara listed on couponmatrix.ukNo matter your preferences, Bondara’s range of adult toys are designed to tease and please. Discover the irresistible deals and enjoy discreet delivery, so that your desires remain secret. With one the biggest selections of toys, accessories and lingerie items in the country, use a Bondara voucher code to bag a bargain on these private wonders as well as a wealth of other treats and accessories designed to bring a bit of spice to even the most boring bedroom.
i-saw-it-first listed on couponmatrix.ukCalling all fashionistas. I Saw It First provide daily updated clothing inspired from the hottest trends and designers to keep you looking fresh and always on point. Whether you want a sizzling dress, cute swimwear, comfy nightwear or pretty much anything fashion, you’ll find a gorgeous selection of brand new never before seen items on I Saw It First. With I Saw It First discount codes you can enjoy looking and feeling great for less. Just as every girl is unique, every item of clothing deserves to be unique too.
my-parcel-delivery listed on couponmatrix.ukMy Parcel Delivery is a multi-award winning courier service which provides Businesses, eBay users and Personal users with a quick and cost-effective method of sending parcels worldwide. The company is built on a solid foundation of great customer service, market leading software and excellent discounted delivery rates (quite often cheaper that using the couriers direct or sending via Royal Mail), which have been secured by partnering with some of the world’s leading couriers – such as UPS, Hermes, Parcelforce, DPD, DX and Collect+ Our parcel delivery comparison allows customers to get quotes on different courier services. Take a look through all the options and choose the one that's right for you. Whether you're looking for a collection service, to drop your parcel off at a local store, extra security, a guaranteed signature or just to use your favourite courier, we're sure we can find one that fits.
shoeaholics listed on couponmatrix.ukIf you’re ever unsure what’s in for footwear this season, you only have to look over the latest additions to the Shoeaholics catalogue. Host to hundreds of shoes and handbags from designer brands like Aldo, Kurt Geiger and Hunter, you’ll be hard-pressed choosing which chic styles to buy for less with a Shoeaholics discount code. With flash sales and new brand launches guaranteed to keep your shoe selection on trend, you’ll never need another store to satiate your craving for phenomenal footwear.
urban-outfitters listed on couponmatrix.ukUrban Outfitters has everything you need for a retro look with a modern twist. Home of the unconventional, UO stocks men and women’s clothing and sportswear brands, as well as quirky gifts and Urban Outfitters home essentials - everything from bedding to record players. We’ll help you save money at Urban Outfitters by showcasing our favourite deals, letting you put that Urban Outfitters promo code to good use. Expect big end-of-season sales that stack with promo codes - watch this space!
wolford-online-boutique listed on couponmatrix.ukSlip into something more luxurious with the help of Groupon's collection of Wolford discount codes. Wolford are premium legwear and lingerie specialists, dressing stylish shoppers from top to toe, under and over. Bodysuits, shapewear, tights, bras and hosiery are available in all shapes and sizes, with premium tops, blouses, cardigans, jackets, skirts, trousers and dresses to go over the top. Styles are figure-hugging and flattering, with an abundance of accessories available to set off outfits. Take advantage of free shipping and returns to make an even bigger saving, along with you Wolford voucher code. Wolford was founded all the way back in 1949 in Austria. From sleek shirts and smart skirts to stand-out dresses, they have all corners of the wardrobe covered, making it even easier for you to be paired with your ideal outfit. Armed with a Wolford voucher code, browse the latest collections to find yourself a soulmate in fabric form. Tired of lusting after lingerie you can't afford? Now you can reinvent yourself with the help of a Wolford voucher to inject some glamour into your life.