After it introduced interchange of up to 1.1 per cent on UPI transactions above ₹2,000 made through prepaid instruments, cards or wallets, the National Payments Corporation of India (NPCI) clarified on Wednesday that 99.9 per cent of UPI transactions are done directly from bank account-to-account, and will not be impacted by the new norms.

“Traditionally, the most preferred method of UPI transactions is linking the bank account in any UPI-enabled app for making payments which contributes over 99.9 per cent of total UPI transactions. These bank account-to-account transactions continue to remain free for customers and merchants,” said NPCI in a release.

Following the inclusion of Prepaid Payment Instruments (PPI Wallets) in the interoperable UPI ecosystem, NPCI last week introduced an interchange fee on merchant transactions, with effect from April 1.

The charge will be levied on transactions of over ₹2,000 made to online merchants, large merchants and small offline merchants. Further, PPI issuers will need to pay 15 bps as a “wallet loading service charge” to the remitter bank for loading over ₹2,000 in the prepaid wallet. NPCI will review the interchange pricing by September 30.

The norms had raised concerns regarding additional charges on UPI transactions in some sections of the market, who feared that this might make transactions costlier for merchants and customers alike.

“The interchange charges introduced are only applicable for the PPI merchant transactions and there is no charge to customers, and it is further clarified that there are no charges for the bank account to bank account based UPI payments (normal UPI payments),” said NPCI on Wednesday. 

With this addition to UPI, customers will have the choice of using any bank account, RuPay Credit card, and prepaid wallets on UPI-enabled apps, it added.