![]() ![]() ![]() ![]() "Recent regulatory guidelines, the Prepaid Payment Instruments (PPI Wallets) have been permitted to be part of the interoperable UPI ecosystem. This is if users make use of UPI to load their wallets through their bank accounts. What the 1.1% interchange fee means and who is it for The issuer of a PPI should pay 15 bps (basis points) as wallet loading service charge to the remitter bank (account holder’s bank) for loading transaction value greater than Rs 2,000. If you are making a PPI payment via UPI at a store, and the QR code is that of PhonePe, then PhonePe will receive the applicable interchange fee from the merchant. These Bank account-to-account transactions continue to remain free for customers and merchants." Who will have to pay these charges This works similar to how merchants are charged for payments made by users via credit cards, also known as merchant discount rate (MDR). The regulatory body in its circular said that these interchanges shall not be applicable to P2P (peer to peer) and P2M (peer to merchant) transactions between “bank account and the PPI wallet.” In a statement, NPCI said, "Traditionally, the most preferred method of UPI transactions is linking the Bank account in any UPI enabled app for making payments which contributes over 99.9% of total UPI transactions. What this means for UPI users in the country NPCI in its statement recently emphasised that "UPI remains free". This means that if users have money in their say PhonePe Wallet and want to make a payment via merchant's UPI QR code, then on transactions above Rs 2,000, an interchange fee of up to 1.1% will be levied. A PPI payment via UPI means a transaction done via a wallet, like PhonePe Wallet through a UPI QR code. Prepaid payment instruments (PPI) include online Wallets (like Paytm Wallet, PhonePe Wallet, Amazon Pay Wallet) and preloaded gift cards. ![]()
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