NPCI proposal to charge interchange fee leaves consumers confused
The NPCI proposal was aimed at increasing revenue for banks and payment service providers, who have been struggling with the high cost of UPI transactions
Hyderabad: A reported proposal of the National Payments Corporation of India (NPCI) for an interchange fee of up to 1.1 percent on Unified Payments Interface (UPI) transactions of over Rs.2,000 made through Prepaid Payment Investments (PPI), has left many consumers confused, apart from raising questions on the Centre’s declared resolve to promote cashless transactions.
The NPCI proposal was aimed at increasing revenue for banks and payment service providers, who have been struggling with the high cost of UPI transactions. However, the NPCI plans triggered confusion among consumers, who raised several doubts about charges on UPI payments done at any provision store or other outlets using QR codes.
Raising a doubt, Maverick, a Twitter user tweeted: “If we are paying at any shops that have QR codes via UPI, will we charged or how will it work?”
The NPCI’s official twitter handle @NPCI_NPCI tweeted in reply: “Hi Maverick, please be informed that UPI is free, fast, secure, and seamless. Bank to Bank transfers on UPI is free.”
Kalpesh Prajapati, another Twitter user asked: “UPI transactions of more than Rs.2, 000 to be charged at 1.1 per cent starting April 1. Is it true?”, to which the NPCI replied that UPI was “free, fast, secure and seamless”.
Amidst all these doubts and apprehensions by the consumers, there were many who raised questions on the Centre’s plans to promote cashless transactions.
Preetham Patil, a Twitter user tweeted: “Why will the merchant bear additional one per cent, if his margin is only 3 to 4 per cent. Will he keep tracking who pays through wallet and who pays directly from bank? They will hide their QR codes now.”
NPCI issues a statement
Meanwhile, the NPCI in a press release issued on Wednesday clarified that there was no charge for the bank account to bank account-based UPI payments or normal UPI payments. The interchange charges were only applicable for the PPI merchant transactions and there would be no charge to customers, the NPCI release said.
“NPCI has 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, and it is further clarified that there are no charges for the bank account to bank account based UPI payments (i.e, normal UPI payments),” it said.
With this addition to UPI, the customers will have the choice of using any bank account, RuPay Credit card and prepaid wallets on UPI-enabled apps, it added.
In recent times, it said, UPI has emerged as the preferred mode of digital payment by offering free, fast, secure and seamless experience. Traditionally, the most preferred method of UPI transactions is linking the bank account in any UPI-enabled app for making payments which contribute over 99.9 per cent of total UPI transactions, it said, adding that such bank account-to-account transactions would continue to remain free for customers and merchants.
