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