NPCI has stated in its circular that an interchange fee will be charged for transactions of more than ₹2,000.

Under this, a total of 1.1% of the interchange fee amount will have to be paid for transactions of more than ₹2,000 through UPI to PPI.

NPCI stated that Prepaid Payment Instruments (PPIs) have been permitted to integrate with the UPI interoperable ecosystem.

In this case, the interchange charge is to be paid for doing PPI merchant transactions.

There is no interchange charge for transferring money from a bank account to another bank account.

The interchange charge is payable on merchant transactions.

At the same time, the circular mentions that there is no charge to be paid on peer-to-peer and peer-to-peer merchant transactions between bank accounts and PPI wallets.

This new rule will come into effect from 1 April 1 i.e. Saturday.

After the implementation of this rule, the NPCI will hold its review meeting before September 30, 2023.

Currently, Google Pay, PhonePe and Paytm are the biggest private players that allow UPI payments on their platforms.