UPI payment new rule: Transactions Over Rs 2,000 To Carry Charge Of 1.1% From April 1

The NPCI has proposed an interchange fee of up to 1.1 percent and the move is aimed at increasing revenue for banks and payment service providers.

Big change in UPI payment charges 

The National Payments Corporation of India (NPCI) has reportedly taken a major decision that could impact consumers making payments via prepaid payment instruments (PPI) such as – Google Pay, PayTM, PhonePe, and other such apps. The NPCI has reportedly set an interchange fee at 1.1% for merchant transactions initiated on the Unified Payments Interface (UPI) network with effect from April 1.


UPI is presently the most preferred and the most used payment system in India that lets users transfer money between bank accounts instantly using their mobile phones. According to reports, the extra fees will have to be paid by users who are making payments to merchants on the UPI network via wallets.

According to the notice, which was cited by several media reports, the 1.1 percent surcharge will apply to transactions over Rs 2,000 in value. NPCI, the governing body that handles digital payments in the country has also set different merchant fee structures for PPI payments on UPI according to different industries.

Not for Customers

So, does this mean that the users will be asked to pay more for UPI transactions? The answer is no. The users will not face the brunt of NPCI’s new order. The new fee on UPI transactions will only be applicable to merchants who accept payments over Rs 2,000 using prepaid payment instruments (PPIs) such as mobile wallets. Individual users making personal transactions using UPI will not be charged any additional fees.


Paytm Payments Bank, in a Twitter post, has clarified that the interchange fees will not be applicable to customers. This means that consumers will not be required to pay any extra charge on making payments from UPI either via a bank account or Paytm wallet.

“Regarding NPCI circular on interchange fees & wallet interoperability, no customer will pay any charges on making payments from #UPI either from bank account or PPI/Paytm Wallet. Please do not spread misinformation. #Mobile payments will continue to drive our economy forward!” read the post shared by the official Twitter handle of Paytm Payments Bank.

Meanwhile, this new rule could have a significant impact on PPI providers and merchants. PPI providers may need to change their fee structures to account for the interchange fee, and merchants may face higher costs for accepting UPI payments. However, the NPCI believes that the long-term benefits of promoting higher-value UPI transactions will outweigh the short-term costs.