0 hidden charges. 0 forex

1.1% Fees on UPI & Rupay Credit Card UPI Charges: Key Details

Reviewed by
Created on
April 26, 2023


What’s Inside

The NPCI or the National Payments Corporation of India announced in March 2023, that there will be a 1.1% charge on UPI transactions from April 1st, 2023. But first things first, these charges do not apply to customers, they only apply to merchants. Meaning that you will not need to pay an extra fee to receive or send money through UPI.

What are the Charges on UPI Transactions?

  • From April 1, 2023, any merchant transactions over ₹2,000 that are conducted through Prepaid Payment Instrument Wallets (PPI Wallets) on UPI will incur an interchange charge of 1.1%. 
  • So, on a transaction amount of ₹2,500 the merchant receiving this money will pay a fee of ₹27.5. But the merchant will not be charged if it’s a bank-to-bank transfer through UPI.
  • These charges only apply if the money has been sent from a pre-paid wallet like a PayTM wallet or PhonePe wallet, where you add money beforehand to make faster payments.

Will There be Fees on Regular UPI Payments?

  • No. It's important to note that there will not be a fee for regular UPI transactions. 
  • Interchange fees are typically associated with card payments, as they help to cover the cost of transactions.
  • According to a statement from the NCPI, the recent regulatory guidelines have allowed PPI Wallets to become part of the interoperable UPI ecosystem. NPCI clarified that the newly introduced interchange charges will only be applied to PPI merchant transactions and not to customers. 
  • Additionally, NPCI confirmed that there will be no charge for regular UPI payments that are conducted between bank accounts.

What This 1.1% Charge Means for the Economy?

This development could bring forth new opportunities for growth, innovation, and competition. By increasing interoperability among payment systems, consumers will have more options and flexibility while transacting with merchants. This could result in a greater adoption of digital payments, promoting financial inclusion and economic development.

RuPay Credit Card on UPI 

In June 2022, the Reserve Bank of India (RBI) announced that individuals could connect their RuPay Credit Cards with the United Payments Interface (UPI). 

Nevertheless, this feature is presently available solely through specific banks that have enabled the linkage of their RuPay credit cards with UPI.

This seems like a welcome move, given the integration of credit cards with UPI will lead to a significant uptick in digital payments. Previously, individuals were limited to connecting their bank accounts or debit cards to UPI apps. Now, with this option of linking RuPay credit cards to UPI, it will become easier to pay at smaller vendors lacking point-of-sale (POS) card swipe machines. 

How to link your RuPay Credit Card to UPI?

Step 1: First, download your favorite UPI Third Party App from the Play / App Store.

Step 2: Next, verify your Mobile Number on the UPI App and complete the registration process.

Step 3: After that, select the "Add Credit Card/Link Credit Card" option.

Step 4: Select your credit card issuer. 

Step 5: Enter your credit card details, including the last 6 digits and expiry date when prompted.

That's it! You're all set to use your credit card with UPI.

Rupay Credit Card UPI Charges

Since the announcement, most people are curious to know the Rupay Credit Card UPI charges that may be levied. 

To facilitate the penetration and usage of RuPay Credit Cards on UPI, there will be no charge for transactions up to ₹2,000, an NPCI circular said. 

For transactions upwards of ₹2000, the applicable MDR amount will be borne by merchants and no additional charges will be levied upon the customers. 

September 2023 Update: Now Avail Pre-sanctioned Credit on UPI

The Reserve Bank of India (RBI) on 4 September 2023 has announced an extension of the UPI's capabilities by allowing pre-sanctioned credit lines from Scheduled Commercial Banks to be used as funding accounts for transactions conducted through the UPI system.

With prior consent, individuals can now make payments via the UPI System using a pre-approved credit line from a Scheduled Commercial Bank. 

UPI Goes International - Check out this short for another new update on UPI payments: https://www.youtube.com/shorts/uy-TBVkiHJ4

In Conclusion

In conclusion, the introduction of a 1.1% charge on UPI transactions for merchants by NPCI, starting from April 1, 2023, represents a significant development in the digital payment landscape. It's crucial to note that these charges do not affect regular UPI users; they are only applicable to merchants, particularly for transactions exceeding ₹2,000 conducted through Prepaid Payment Instrument Wallets (PPI Wallets). Additionally, the integration of RuPay Credit Cards with UPI offers a promising avenue for expanding digital payments, particularly for small vendors. With recent updates allowing pre-sanctioned credit lines and UPI's international reach, the future of digital payments in India looks promising, offering more choices and convenience to users.

Payments on Fi - Fast & Rewarding! 

Fi has got a buffet of payment modes for you to choose from – this includes UPI, Direct-to-Bank, Debit Card, IMPS, and more. Best part? You get rewarded for making payments on Fi! Earn cashback or Fi-Coins every time you pay using UPI on Fi. 

Frequently Asked Questions

1. Will I have to pay 1.1% charge for making a UPI payment?

No. This 1.1% charge will only be levied on merchants, i.e. businesses. And they will only be charged if the customer makes the payment from a UPI ID that is connected to a pre-paid instrument like a wallet.

2. Will there be any other charges for making UPI payments?

No. The Finance Minister, Nirmala Sitharaman, said in her budget presentation of 2023 that there will not be any charges for making UPI payments. The Indian government views the UPI a ‘public good’ or a public resource that should not be monetised.

3. Why has the NPCI introduced this 1.1% charge on UPI payments?

This is an interchange fee that merchants will have to pay, to cover the transaction cost. Transaction cost involves the maintenance of banking infrastructure necessary to make UPI payments seamless and round-the-clock.

4. Is there any charge for sending money to someone via UPI?

No. There are no charges for sending money directly to another person. This 1.1% charge only applies to businesses if the money is sent using a pre-paid wallet.


Fi Money is not a bank; it offers banking services through licensed partners and investment services through epiFi Wealth Pvt. Ltd. and its partners. This post is for information only and is not professional financial advice.
Share this article
Copied Link!
Credit Cards
1.1% Fees on UPI & Rupay Credit Card UPI Charges: Key Details


View similar articles in
Credit Cards
Get the Fi app