UPI payment charges for bank account-to-account money transfer from April 1: It’s free!

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UPI payment charges for bank account-to-account money transfer from April 1: It’s free!
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UPI bank account to account money transfer fees and penalties beginning April 1: The National Payments Corporation of India (NPCI) today emphasised that bank-to-bank account transfers via UPI will continue to be free for users and merchants. As a result, you can continue to transmit money to another account or the cell phone associated with a bank account for free via UPI.

“Historically, the most popular way 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.” Consumers and merchants continue to benefit from free bank account-to-account transactions, according to NPCI.

The statement from NPCI comes in the midst of consumer misunderstanding regarding the planned interchange fee of 1.1% on UPI transactions above Rs 2000. According to the NPCI, interchange costs are only applied to PPI merchant transactions and there is no charge to customers.

“According to recent regulatory rules, Prepaid Payment Instruments (PPI Wallets) are now allowed to be part of an interoperable UPI ecosystem.” As a result, the NPCI has now allowed PPI wallets to be a part of the interoperable UPI ecosystem. “The interchange charges implemented are solely applicable to PPI merchant transactions, and there is no price to customers,” NPCI stated.

According to experts, the revelation of full KYC wallet compatibility across all UPI businesses is a key step towards the growth of digital payments in India.

The NPCI interoperability rules may make prepaid wallets more enticing to users by enabling innovative payment use cases while eliminating the requirement for customers to carry multiple cards.

“Many merchants, for example, at point-of-sale, use wallets to receive customer payments.” Interoperability will make collection much easier for businesses because it will allow merchants to accept wallet payments regardless of the wallet used by the customer. Furthermore, because clients can pay via UPI or card infrastructure, there will be no requirement for unique integrations with a single wallet to accept payments on a website. Customers will have more payment options as a result of this,” stated Akash Sinha, Co-founder and CEO of Cashfree Payment.

“Wallet interoperability with UPI will catalyse the advancement of digital payments, boosting the consumer experience.” We look forward to the announcement of similar programmes and steps, as well as the establishment of an effective regulatory environment, to support the long-term growth of digital payments,” he added.

According to Rajsri Rengan, India Head of Development, Banking, and Payments at FIS, the NPCI’s new interoperability requirements for prepaid payment instruments are an important step towards developing a more inclusive and smooth digital payments ecosystem in India.

“By increasing payment system interoperability, customers will have more choice and flexibility in how they transact with businesses, leading to higher adoption of digital payments and, ultimately, driving financial inclusion and economic growth.” This move will also stimulate competition and improve the quality of services supplied to consumers, according to Rengan.

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