PPI merchant transactions of over ₹2,000 to attract 1.1% charge from April 1

Starting April 1, merchant transactions exceeding ₹2,000 in value done using Prepaid Payment Instruments (PPI Wallets) on UPI will attract an interchange charge of 1.1%. However, “the new interchange charges are only applicable for the PPI merchant transactions and there is no charge to customers,” the National Payments Corporation of India (NPCI), which governs UPI,, said in a statement on Wednesday.

“It is further clarified that there are no charges for the bank account to bank account based UPI payments (i.e. normal UPI payments),” the NPCI added.


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The Interchange fee is generally associated with card payments to cover transaction cost.

In the statement, NCPI said as per recent regulatory guidelines, the PPI Wallets had been permitted to be part of the interoperable UPI ecosystem.

Rajsri Rengan, India Head of Development, Banking and Payments, at FIS said in a statement, ”The new interoperability guidelines for prepaid payment instruments announced by the NPCI is a significant step towards building a more inclusive and seamless digital payments ecosystem in India.”

“The interoperability of digital wallets and UPI can be a game-changer for the Indian fintech industry, as it opens up new opportunities for innovation, growth, and competition. With greater interoperability between payment systems, consumers will have more choice and flexibility in how they transact with merchants, leading to increased adoption of digital payments and ultimately driving financial inclusion and economic growth,” Ms. Rengan said.

“This move will also encourage innovation in the digital payments space, fostering competition and improving the quality of services offered to consumers,” she added.

“We believe this is a positive development for the Indian economy and the banking system as a whole, and we look forward to continuing to support the growth and development of digital payments in India,” Ms. Rengan observed.