UPI payments of more than Rs 2,000 will be charged at 1.1%?

The National Payments Corporation of India (NPCI) stated: “If a transaction exceeds Rs 2,000, users will be charged 1.1 percent of the transaction value for using PPIs (prepaid payment instruments).” Let’s find out more about it.

As per the circular, interchange pricing will be introduced on April 1, 2023, and reviewed again by September 30, 2023. Interchange fees aim to increase revenue for banks and payment service providers.

Will this affect us in any way?

According to the NPCI’s circular, the end-user will not be impacted and will continue to get free UPI transactions.

Peer-to-peer (P2P) and peer-to-merchant (P2PM) transactions between a bank account and a PPI will not be charged an interchange fee.?

That is, this fee will only be charged for digital wallet transactions made through a merchant’s QR code, and the merchant acquirer will most likely fund transactions on behalf of the wallet issuer. Therefore, the interchange charge has no direct effect on the business or the consumer.

Paytm Payments Bank also explained that, on interchange fees and wallet interoperability, no consumer would pay any fees when using the UPI to make payments from a bank account or PPI/Paytm Wallet.

NCPI further stated that customers can now use any bank account, a RuPay credit card, or prepaid wallets on UPI-enabled apps.

Is this beneficial to us?

Yes, as a business owner or a freelancer, there may be a possibility that you can deduct the UPI transaction tax from your taxes.

However, this has not yet been initiated, and it is advisable to speak with a tax expert, https://taxblock.in/services, to get personalized guidance based on your situation to get better knowledge and benefits.