The National Payments Corporation of India (NPCI) announced on Wednesday that Prepaid Payment Instruments (PPI wallets) can now be part of the interoperable UPI ecosystem at no cost to customers.
Furthermore, there are no fees for bank account to bank account UPI payments (normal UPI payments).
“The interchange charges introduced are only applicable for the PPI merchant transactions and there is no charge to customers, NPCI said in a statement.
Customers will be able to use any bank account, RuPay Credit card, and prepaid wallets on UPI-enabled apps with this addition to UPI.
A fake WhatsApp message recently went viral, claiming that people would have to pay a fee for online UPI transactions.
According to the NPCI, recent regulatory guidelines have allowed PPI wallets to be a part of the interoperable UPI ecosystem.
Rajsri Rengan, India Head of Development, Banking and Payments, at FIS, said that the new interoperability guidelines for prepaid payment instruments 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,” Rengan said.
According to the new rule, UPI transactions made through PPIs such as wallets and credit cards will incur an interchange fee of 1.1% beginning April 1 and customers will not be charged.
Historically, the most preferred method of UPI transactions has been linking the bank account in any UPI enabled app for making payments, which accounts for more than 99.9% of total UPI transactions.