Which UPI payments will attract interchange fee?

The National Payments Corporation of India (NPCI) has suggested that United Payments Interface (UPI) transactions made via prepaid instruments

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such as wallets will attract an interchange fee of 1.1 per cent for certain merchant payments from April 1, 2023.

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The 1.1 per cent interchange fee will be levied only on merchant payments of above Rs 2,000 to specified merchant categories, according to a circular by NPCI dated March 24, 2023.

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However, there will be no fee if the transaction amount is up to Rs 2,000.

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Which transactions will attract a fee from April 1, 2023? ET Wealth decodes how this new rule will affect you.

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As per the circular by NPCI, certain UPI merchant transactions made via prepaid instruments will carry an interchange fee of up to 1.1 per cent of the transaction amount.

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The interchange fee will be applicable on specified categories of merchants such as online merchants, large merchants, and small merchants for transactions of over Rs 2,000 from April 1, 2023.

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The interchange fee will not be applicable to peer-to-peer (P2P) transactions or peer-to-peer-merchant (P2PM) transactions between a bank and the prepaid wallet, said NPCI.

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