UPI bank account to account money transfer fees and charges from April 1: The National Payments Corporation of India (NPCI) today clarified that the bank account-to-account transactions through UPI continue to remain free for customers and merchants. As such, you can continue to send money to another account or the mobile number linked to a bank account through UPI for free.
“Traditionally, the most preferred method of UPI transactions is linking the Bank account in any UPI-enabled app for making payments which contributes over 99.9% of total UPI transactions. These Bank account-to-account transactions continue to remain free for Customers and Merchants,” NPCI said.
The clarification from NPCI comes amid confusion among users over the proposed interchange fee of 1.1% on UPI transactions over Rs 2000. The NPCI said that interchange charges are only applicable for the PPI merchant transactions and there is no charge to customers.
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“Recent regulatory guidelines, the Prepaid Payment Instruments (PPI Wallets) have been permitted to be part of interoperable UPI ecosystem. In view of this NPCI has now permitted the PPI wallets to be part of interoperable UPI ecosystem. The interchange charges introduced are only applicable for the PPI merchant transactions and there is no charge to customers,” said NPCI.
Experts say that the announcement of full interoperability of KYC wallets across all UPI merchants is a significant step towards the growth of digital payments in India.
The NPCI guidelines on interoperability may make prepaid wallets more appealing to customers by opening up newer use cases of payments while eliminating the need for customers to carry multiple cards.
“Many merchants use wallets for accepting customer payments, for instance, at PoS. Interoperability will significantly ease collection for them since it will allow merchants to accept wallet payments regardless of the wallet being used by the customer. Further, it will eliminate the need for specific integrations with a particular wallet to accept payments on a website since customers can also pay via UPI or card infrastructure. This will increase the payment alternatives for customers,” said Akash Sinha, Co-founder & CEO, Cashfree Payment.
“The interoperability of wallets with UPI will catalyse the progress of digital payments, enhancing the customer experience. We look forward to the announcement of similar such initiatives and measures while ensuring an effective regulatory environment, to assist the sustainable growth of digital payments,” he added.
Rajsri Rengan, India Head of Development, Banking and Payments, at FIS said the new interoperability guidelines for prepaid payment instruments announced by the NPCI is a significant step towards building a more inclusive and seamless digital payments ecosystem in India.
“With greater interoperability between payment systems, consumers will have more choice and flexibility in how they transact with merchants, leading to increased adoption of digital payments and ultimately driving financial inclusion and economic growth. This move will also encourage innovation in the digital payments space, fostering competition and improving the quality of services offered to consumers,” said Rengan.