The NPCI has proposed surcharges on merchant transactions on the Unified Payments Interface for prepaid payment instruments (PPI).
The National Payments Corporation of India (NPCI) issued a circular proposing “Prepaid Payment Instruments (PPI)” fees on merchant transactions over the Unified Payments Interface (UPI)
The UPI payment system’s regulatory council also stated that PPI fees would be applied on UPI transactions exceeding 2,000. The interchange will be 1.1% of the transaction value.
The interchange fee is charged to cover the costs associated with accepting, processing, and authorizing transactions. This is likely to increase the transaction’s cost. The new rule will go into effect on April 1.
According to the circular, the issuer of prepaid instruments will also be compelled to pay 15 basis points of the cost to the remitter bank for loading a transaction value greater than 2,000.
Note, the fee will not apply to person-to-person or merchant-to-merchant transactions between a bank and a prepaid wallet. On or before September 30, NPCI will examine the stated pricing.
