NPCI has recommended interchange fees on UPI for transactions over Rs 2000 made through Prepaid Payment Instruments (PPIs).
The NPCI has proposed an interchange fee of up to 1.1 per cent.
The new fee on UPI transactions will only apply to merchants who accept payments over Rs 2,000.
The NPCI has proposed an interchange fee of up to 1.1% and the move is aimed at increasing revenue for banks and payment service providers.
There are a couple of PPIs in India, including Paytm, PhonePe, and Google Pay. An interchange fee is a fee that is charged by one bank to another bank for processing a transaction.
In the case of UPI transactions, the interchange fee is paid by the bank of the merchant (the person or business receiving the payment) to the bank of the payer (the person making the payment).