Last Updated on 2 years by Sophia
The National Payments Corporation of India (NPCI) has issued a circular on the Unified Payments Interface (UPI). This circular recommended that a PPI fee be charged on trade payments made through UPI starting from the next business year, i.e. April 1, 2023. According to the circular, it was said to introduce an exchange fee. Meanwhile, the NPCI has now made it clear that no fees will be charged to customers due to the start of the PPI exchange.
Trade transactions over Rs 2,000 through UPI will be charged.
Over the past two days, the news of deducting the surcharge for transactions over Rs 2,000 through the Unified Payment Interface (UPI) has been in the headlines. This additional fee is called Prepaid Payment Instrument i.e. PPI fee which will be charged at 1.1% rate on merchant transactions over Rs 2000. The biggest confusion about this was, would regular users fill it out? On this occasion, the National Payments Corporation of India (NPCI) clarified the situation by issuing a press release. Let’s understand the whole issue of this PPI collection through Q&A…
What will change in the UPI from April 1?
The NPCI circular states that from April 1, 2023, it was recommended to introduce a PPI fee for trading transactions made through UPI. Accordingly, a PPI fee will be charged on trade transactions above Rs 2,000.
Will this PPI fee be paid by the regular buyer?
No, according to the NPCI, PPI wallets have recently been allowed to be part of the interoperable UPI ecosystem. This will not be an additional burden for the ordinary buyer, this is a matter between the seller and the bank. So, it will be collected from the merchant.
What is PPI after all?
PPI is a type of digital wallet that allows the user to store their money. Companies such as Paytm and PhonePe provide PPI capability.
What will be the PPI or exchange fee?
The PPI fee or exchange fee is actually a fee paid by payment service companies to wallet issuers such as banks. It is charged to cover the costs of receiving, processing and authorizing transactions. It is proposed to implement in the amount of 1.1% of merchant transactions.
Will there be fees to send money from a bank account?
The NPCI has made it clear that there is no charge for transferring money from account to account, meaning you can transfer money as much as you want. The exchange fee will be deducted when sending money from the wallet to the account. Which will be deducted from the amount of the merchant.
Will UPI payments become more expensive?
Looking at the circular issued by the NPCI, this fee will apply to merchant UPI transactions. That is, it will not apply to Peer to Peer (P2P) and Peer to Merchant (P2M) transactions between banks and prepaid wallets. That is, buyers do not need to panic. You can use the free UPI just like before.
Will there be a fee for purchasing Rs 2,000 worth of items in a store?
No, this rule applies to transactions over Rs 2,000. That is, if you make a payment in the amount of 2001 or more in the store by scanning the QR code installed there and making the UPI from the wallet, will PPI be applied?
How to recover this amount from the seller?
According to NPCI, if the buyer makes the payment to UPI through the store owner’s bank account, no commission is charged. On the other hand, if you transfer money by scanning the QR code after adding money to the wallet, the exchange fee will be deducted. But the customer does not have to pay any additional fees.
Can the client use all the features of the wallet for free?
The NPCI has made it clear that there is no charge for making payments from one account to another through UPI. In addition, the customer will have the option to use a bank account, Rupay credit card, or prepaid wallets in the UPI-based app.
I am a shop owner, how do I pay the fee?
If a customer sends money directly to you through a UPI bank account, there is no fee on the amount of money they can send. On the other hand, if a client pays you more than 2000 via wallet, then 1.1% will be deducted to the bank account associated with the QR code. This will be the exchange fee.
Are transfers from account to account free for both the buyer and the seller?
Yes, UPI payments from bank account to bank account will be absolutely free for the customer and merchant. There are no restrictions on this. This fee will be applied when the buyer sends more than 2000 rupees to the seller’s account by adding money to the wallet.
Does it have something to do with the client?
The client will send money to their account via UPI via the merchant’s scan code. The exchange fee will be deducted by the respective bank from the amount paid to the seller. To put it simply, this is entirely a question pertaining to the merchant and the bank. will not apply in this case. This can be seen as the same process where a merchant is charged for making a payment with a credit card, similarly this PPI will also be deducted. Directly ordinary people will not have to pay this fee.
Will the seller return this deduction from the buyer?
No, not at all… According to the NPCI, this fee cannot be charged to the customer. This applies to trading accounts. On this occasion, Chairman of Vedant Asset Ltd Lalit Tripathi believes that it is generally accepted that no company or distributor is responsible for itself, it passes it on to the client, and, in having seen it, the burden will be borne in the future. But it will fall on the buyer. However, in the case of cards, many sellers charge the buyer by adding this fee, referring to the deduction of their money, but this is completely wrong and illegal.
Will there be a fee for transferring money from a bank?
Most users often use UPI to transfer money from their bank account. Specify here that if you transfer money from a bank through UPI, then this service is absolutely free, i.e. commission is not charged. The NPCI also made it clear in its circular that there will be no charge for making a general UPI payment i.e. bank transactions etc.
Where to pay the PPI fee?
The National Payments Corporation (NPCI) has set different exchange fees for different regions. The lowest exchange fee is charged in the agriculture and telecommunications sector, while it includes many categories such as telecommunications, education, agriculture, insurance, to which this fee will apply. However, the fee rate varies by category and the maximum fee is 1.1% of the UPI payment amount.
How many UPI transactions occur each month in the country?
A press release from the NPCI on Wednesday said that about 8 billion rupees worth of UPI deal is being processed in the country every month. This transaction is absolutely free for the buyer and seller. However, from April 1, preparations are underway to charge a PPI commission when paying UPI in the amount of more than 2000 per merchant.
What percentage of transactions are through UPI?
According to the National Payments Corporation of India, 99.9% of transactions in the country are made through UPI. Along with that, let us tell you that 70 percent of trading transactions are over Rs 2,000.
Urban or rural…. Which customers will suffer the most?
According to experts, if the wallet is replenished, there will be no particular blow to the inhabitants of small villages, towns and small towns. Whereas in big cities where wallet replenishment is more, it will make a difference. When this fee is implemented, most transactions will only be visible from a bank account.
Source Link: aaj Tak