The unified payment interface (UPI) has materialized as the favored approach for digital payments by presenting an unencumbered, swift, impervious, and seamless experience. Normally, interlinking bank accounts via any UPI-enabled app for conducting transactions is the most prevalent method, accounting for over 99.9% of the entire UPI transactions. Nevertheless, UPI can now enable money transfers from pre-paid wallets such as Paytm, Amazon Pay, Mobikwik, and other pre-paid wallets to UPI beneficiaries via QR code or UPI handle.
The National Payments Corporation of India (NPCI) has sanctioned prepaid payment instruments (PPI) wallets to become part of the interoperable UPI framework and implemented a 1.1% levy on UPI transactions surpassing Rs 2,000 while utilizing PPI. “The interchange charges implemented are only relevant to PPI merchant transactions, with no charge to customers, and it is furthermore elucidated that there are no charges for bank account-based UPI payments (i.e., normal UPI payments),” it stated.
Here’s all you necessitate to comprehend regarding the most recent UPI modifications.
Who will benefit from this?
People who load funds into prepaid wallets but do not want to link bank accounts with UPI can utilize wallets for payments without fusing bank accounts with UPI. Shops will now be able to accept UPI payments from these users.
Are there new fees?
For those using bank accounts for UPI payments, there are no alterations. On the new feature (wallet on UPI), the merchant will pay a 1% fee for transactions exceeding Rs 2000.
Is there any fee for wallet users?
Wallet users will not incur any payment for transactions. For loading funds into wallets using UPI, there will be no fees as long as the amount is below Rs 2000, regardless of how frequently the user loads money. For loading more than Rs 2000, there will be a 0.15% charge, which equates to Rs 3 on Rs 2000.
Isn’t UPI supposed to be free?
The government mandated that UPI is free for account-to-account transfers’ basic purpose. However, there will be fees when merchants utilize UPI infrastructure to accept other instruments such as prepaid cards or credit cards.
In conclusion, the UPI has emerged as the most preferred mode of digital payment in India due to its fast, secure, and seamless experience. With the recent modifications allowing prepaid payment instruments (PPI) wallets to be part of the UPI ecosystem, users who prefer not to link their bank accounts with UPI can now use wallets for payments without any additional charges. While merchants using UPI infrastructure to accept other instruments may have to pay a fee, there are no charges for bank account to bank account-based UPI payments. Overall, these changes have further enhanced the convenience and accessibility of UPI for users and merchants alike.