Several social media users have claimed that Unified Payments Interface (UPI) is no longer free and will charge a 1.1 percent fee to all its customers of UPI transactions of Rs 2000 or above.
The claim also states that this new rule will come in action from 1 April.
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(We also received a query about this claim on our WhatsApp tipline.)
But who will really pay a 1.1 percent interchange fee?: The National Payment Corporation of India (NPCI) has clarified that the customer won't be charged a 1.1 percent fee, as claimed.
NPCI also stated that starting from 1 April, interchange fees, a fee charged by one bank to another bank for processing a transaction, will be charged only to merchant transactions above Rs 2000 made through Prepaid Payment Instruments (PPI).
PPI transactions include UPI transactions made via wallets and credit cards.
Official circular of NPCI: The official circular by NPCI clearly states that these PPI charges will be levied only on merchant transactions.
It adds that 1.1 percent of the transaction fee will be appiled to payments made to merchants with a transactional amount of Rs 2000 or above.
It also states that this interchange fee will not apply to peer-to-peer (P2P) or peer-to-peer-merchant (P2PM) transactions.
The document also states that this fee will be charged from 1 April and will be reviewed by 30 September 2023.
Further in the document, NPCI also states that the interchange fees will fall in the range of 0.5 to 1.1 percent.
There is a different amount of fees ranging from 0.5 percent on fuel; 0.7 percent on telecom, utilities/post office, education, and agriculture; 0.9 percent for supermarkets and 1 percent for mutual funds, government, insurance and railways.
NPCI also shared a clarification on Twitter on 29 March.
It shared a press release that clarified that customers wouldn't have to pay any fee on UPI transactions as they are only applicable to PPI merchange transactions.
Paytm's clarification on the matter: Patym, an application for online payments, also tweeted to dismiss the claim about customers paying an additional 1.1 percent fee on their UPI transactions.
Conclusion: A misleading claim about customers being charged an additional fees of 1.1 percent on UPI transactions is going viral on social media.
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