{"id":3977,"date":"2024-10-16T12:14:29","date_gmt":"2024-10-16T06:44:29","guid":{"rendered":"https:\/\/in.nttdatapay.com\/blog\/?p=3977"},"modified":"2025-07-10T12:34:16","modified_gmt":"2025-07-10T07:04:16","slug":"what-is-upi-interchange-fee","status":"publish","type":"post","link":"https:\/\/in.nttdatapay.com\/blog\/what-is-upi-interchange-fee\/","title":{"rendered":"What is UPI Interchange Fee And How Does It Impact Payments?"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">The National Payments Corporation of India (NPCI) recently introduced an interchange fee structure for <\/span><span style=\"font-weight: 400;\">Unified Payments Interface (UPI)<\/span><span style=\"font-weight: 400;\"> transactions made through prepaid payment instruments (PPIs) like digital wallets.\u00a0<\/span><\/p>\r\n<p><span style=\"font-weight: 400;\">But what exactly is this UPI interchange fee? And how will it impact online payments? Does this include regular person-to-person and person-to-merchant transactions? Should customers need to pay any surcharges as an interchange?<\/span> <span style=\"font-weight: 400;\">In this blog, Let&#8217;s break down the UPI interchange fee and its impact in detail.\u00a0<\/span><\/p>\r\n<p><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;&lt;p class=&quot;wpcf7-contact-form-not-found&quot;&gt;&lt;strong&gt;Error:&lt;\/strong&gt; Contact form not found.&lt;\/p&gt;&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:6659,&quot;3&quot;:{&quot;1&quot;:0},&quot;4&quot;:{&quot;1&quot;:2,&quot;2&quot;:16777215},&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:2236962},&quot;15&quot;:&quot;Arial, Helvetica, sans-serif&quot;}\">\n<div class=\"wpcf7 no-js\" id=\"wpcf7-f2460-o1\" lang=\"en-GB\" dir=\"ltr\" data-wpcf7-id=\"2460\">\n<div class=\"screen-reader-response\"><p role=\"status\" aria-live=\"polite\" aria-atomic=\"true\"><\/p> <ul><\/ul><\/div>\n<form action=\"\/blog\/wp-json\/wp\/v2\/posts\/3977#wpcf7-f2460-o1\" method=\"post\" class=\"wpcf7-form init\" aria-label=\"Contact form\" novalidate=\"novalidate\" data-status=\"init\">\n<fieldset class=\"hidden-fields-container\"><input type=\"hidden\" name=\"_wpcf7\" value=\"2460\" \/><input type=\"hidden\" name=\"_wpcf7_version\" value=\"6.1.4\" \/><input type=\"hidden\" name=\"_wpcf7_locale\" value=\"en_GB\" \/><input type=\"hidden\" name=\"_wpcf7_unit_tag\" value=\"wpcf7-f2460-o1\" \/><input type=\"hidden\" name=\"_wpcf7_container_post\" value=\"0\" \/><input type=\"hidden\" name=\"_wpcf7_posted_data_hash\" value=\"\" \/><input type=\"hidden\" name=\"_wpcf7_recaptcha_response\" value=\"\" \/>\n<\/fieldset>\n<div class=\"cus-form\">\n\t<p style=\"font-size: 24px;font-weight: 600;text-align: center;\">Enquire Now\n\t<\/p>\n\t<p><label>Products Required:<\/label><span class=\"wpcf7-form-control-wrap\" data-name=\"products\"><select class=\"wpcf7-form-control wpcf7-select wpcf7-validates-as-required form-control\" aria-required=\"true\" aria-invalid=\"false\" name=\"products\"><option value=\"Payment Gateway\">Payment Gateway<\/option><option value=\"POS Machine\">POS Machine<\/option><option value=\"Reseller\">Reseller<\/option><\/select><\/span><br \/>\n<span class=\"wpcf7-form-control-wrap\" data-name=\"uname\"><input size=\"40\" maxlength=\"400\" class=\"wpcf7-form-control wpcf7-text wpcf7-validates-as-required form-control\" aria-required=\"true\" aria-invalid=\"false\" placeholder=\"Name*\" value=\"\" type=\"text\" name=\"uname\" \/><\/span><br \/>\n<span class=\"wpcf7-form-control-wrap\" data-name=\"phone\"><input size=\"40\" maxlength=\"400\" class=\"wpcf7-form-control wpcf7-tel wpcf7-validates-as-required wpcf7-text wpcf7-validates-as-tel form-control\" aria-required=\"true\" aria-invalid=\"false\" placeholder=\"Phone*\" value=\"\" type=\"tel\" name=\"phone\" \/><\/span><br \/>\n<span class=\"wpcf7-form-control-wrap\" data-name=\"email\"><input size=\"40\" maxlength=\"400\" class=\"wpcf7-form-control wpcf7-email wpcf7-validates-as-required wpcf7-text wpcf7-validates-as-email form-control\" aria-required=\"true\" aria-invalid=\"false\" placeholder=\"Email*\" value=\"\" type=\"email\" name=\"email\" \/><\/span><br \/>\n<span class=\"wpcf7-form-control-wrap\" data-name=\"message\"><textarea cols=\"10\" rows=\"3\" maxlength=\"2000\" class=\"wpcf7-form-control wpcf7-textarea form-control\" aria-invalid=\"false\" placeholder=\"Message\" name=\"message\"><\/textarea><\/span><br \/>\n\t\n\t<input class=\"wpcf7-form-control wpcf7-hidden\" id=\"utm\" value=\"\" type=\"hidden\" name=\"utm\" \/><input class=\"wpcf7-form-control wpcf7-submit has-spinner\" type=\"submit\" value=\"Submit\" \/>\n\t<\/p>\n<\/div>\n<style>\n.cus-form .form-control{width: 100%!important;margin: 7px 0px;padding: 8px;border-radius: 3px;height: auto;line-height: 20px;}\n.cus-form{display: block;margin: 0 auto;max-width: 400px;width: 100%;padding: 20px;box-shadow: 0px 0px 4px 0px #0000002b;border-radius: 6px;margin-bottom: 25px;padding-bottom: 0px;}\n.cus-form .wpcf7-submit{margin: 0 auto;display: block;}\n.cus-form h3{background: #ff6644;text-align: center;margin: -21px;margin-bottom: 20px;padding: 6px;}\n<\/style>\n<p><script>\ndocument.getElementById(\"utm\").value = window.location.href;\n\ndocument.addEventListener( 'wpcf7mailsent', function( event ) {\n location = 'https:\/\/in.nttdatapay.com\/blog\/thankyou\/';\n}, false );\n<\/script>\n<\/p><div class=\"wpcf7-response-output\" aria-hidden=\"true\"><\/div>\n<\/form>\n<\/div>\n<\/span><\/p>\r\n<h2><span style=\"font-weight: 400;\">Understanding the UPI Interchange Fee<\/span><\/h2>\r\n<p><span style=\"font-weight: 400;\">Unified Payments Interface (UPI), which has emerged as one of the most successful real-time payment systems. However, as UPI grows in scale and adoption, questions arise around its long-term sustainability.\u00a0<\/span><\/p>\r\n<p><span style=\"font-weight: 400;\">NPCI&#8217;s new fee addresses this by generating a steady income for wallet issuers from merchant transactions over Rs. 2000. Fees will range from 0.5-1.1% based on the merchant category. Banks also benefit from wallet load charges.<\/span><\/p>\r\n<h2 style=\"text-align: center;\"><em><span id=\"Recent_Web_Stories\">Recent Web Stories<\/span><\/em><\/h2>\r\n\t\t<div class=\"web-stories-list alignnone has-archive-link is-view-type-circles is-style-default is-carousel\" data-id=\"1\">\n\t\t\t<div\n\t\t\tclass=\"web-stories-list__inner-wrapper carousel-1\"\n\t\t\tstyle=\"--ws-circle-size:150px\"\n\t\t\t>\n\t\t\t\t\t\t\t\t\t<div\n\t\t\t\t\tclass=\"web-stories-list__carousel circles\"\n\t\t\t\t\tdata-id=\"carousel-1\"\n\t\t\t\t\tdata-prev=\"Previous\"\n\t\t\t\t\tdata-next=\"Next\"\n\t\t\t\t\t>\n\t\t\t\t\t\t\t\t\t<div\n\t\t\t\tclass=\"web-stories-list__story\"\n\t\t\t\tdata-wp-interactive=\"web-stories-block\"\n\t\t\t\tdata-wp-context='{\"instanceId\":1}'\t\t\t\tdata-wp-on--click=\"actions.open\"\n\t\t\t\tdata-wp-on-window--popstate=\"actions.onPopstate\"\n\t\t\t\t>\n\t\t\t\t\t\t\t<div class=\"web-stories-list__story-poster\">\n\t\t\t\t<a href=\"https:\/\/in.nttdatapay.com\/blog\/web-stories\/future-of-digital-currency-how-to-use-cbdc-in-india\/\" >\n\t\t\t\t\t<img\n\t\t\t\t\t\tsrc=\"https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/Future-of-Digital-Currency-How-to-Use-CBDC-in-India-poster-page-640x853.jpg\"\n\t\t\t\t\t\talt=\"Future of Digital Currency: How to Use CBDC in India\"\n\t\t\t\t\t\twidth=\"185\"\n\t\t\t\t\t\theight=\"308\"\n\t\t\t\t\t\t\t\t\t\t\t\t\tsrcset=\"https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/Future-of-Digital-Currency-How-to-Use-CBDC-in-India-poster-page.jpg 640w, https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/Future-of-Digital-Currency-How-to-Use-CBDC-in-India-poster-page-105x140.jpg 105w, https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/Future-of-Digital-Currency-How-to-Use-CBDC-in-India-poster-page-311x414.jpg 311w, https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/Future-of-Digital-Currency-How-to-Use-CBDC-in-India-poster-page-149x199.jpg 149w, https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/Future-of-Digital-Currency-How-to-Use-CBDC-in-India-poster-page-60x80.jpg 60w, https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/Future-of-Digital-Currency-How-to-Use-CBDC-in-India-poster-page-150x200.jpg 150w\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tsizes=\"auto, (max-width: 640px) 100vw, 640px\"\n\t\t\t\t\t\t\t\t\t\t\t\tloading=\"lazy\"\n\t\t\t\t\t\tdecoding=\"async\"\n\t\t\t\t\t>\n\t\t\t\t<\/a>\n\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<div\n\t\t\t\tclass=\"web-stories-list__story\"\n\t\t\t\tdata-wp-interactive=\"web-stories-block\"\n\t\t\t\tdata-wp-context='{\"instanceId\":1}'\t\t\t\tdata-wp-on--click=\"actions.open\"\n\t\t\t\tdata-wp-on-window--popstate=\"actions.onPopstate\"\n\t\t\t\t>\n\t\t\t\t\t\t\t<div class=\"web-stories-list__story-poster\">\n\t\t\t\t<a href=\"https:\/\/in.nttdatapay.com\/blog\/web-stories\/top-reasons-why-online-payment-fails\/\" >\n\t\t\t\t\t<img\n\t\t\t\t\t\tsrc=\"https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/Top-Reasons-Why-Online-Payment-Fails-poster-page-640x853.jpg\"\n\t\t\t\t\t\talt=\"10 Top Reasons Why Online Payment Fails?\"\n\t\t\t\t\t\twidth=\"185\"\n\t\t\t\t\t\theight=\"308\"\n\t\t\t\t\t\t\t\t\t\t\t\t\tsrcset=\"https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/Top-Reasons-Why-Online-Payment-Fails-poster-page.jpg 640w, https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/Top-Reasons-Why-Online-Payment-Fails-poster-page-105x140.jpg 105w, https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/Top-Reasons-Why-Online-Payment-Fails-poster-page-311x414.jpg 311w, https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/Top-Reasons-Why-Online-Payment-Fails-poster-page-149x199.jpg 149w, https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/Top-Reasons-Why-Online-Payment-Fails-poster-page-60x80.jpg 60w, https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/Top-Reasons-Why-Online-Payment-Fails-poster-page-150x200.jpg 150w\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tsizes=\"auto, (max-width: 640px) 100vw, 640px\"\n\t\t\t\t\t\t\t\t\t\t\t\tloading=\"lazy\"\n\t\t\t\t\t\tdecoding=\"async\"\n\t\t\t\t\t>\n\t\t\t\t<\/a>\n\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<div\n\t\t\t\tclass=\"web-stories-list__story\"\n\t\t\t\tdata-wp-interactive=\"web-stories-block\"\n\t\t\t\tdata-wp-context='{\"instanceId\":1}'\t\t\t\tdata-wp-on--click=\"actions.open\"\n\t\t\t\tdata-wp-on-window--popstate=\"actions.onPopstate\"\n\t\t\t\t>\n\t\t\t\t\t\t\t<div class=\"web-stories-list__story-poster\">\n\t\t\t\t<a href=\"https:\/\/in.nttdatapay.com\/blog\/web-stories\/what-are-upi-transaction-mistake\/\" >\n\t\t\t\t\t<img\n\t\t\t\t\t\tsrc=\"https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/What-Are-UPI-Transaction-Mistake-poster-page-640x853.jpg\"\n\t\t\t\t\t\talt=\"What Are UPI Transaction Mistake?\"\n\t\t\t\t\t\twidth=\"185\"\n\t\t\t\t\t\theight=\"308\"\n\t\t\t\t\t\t\t\t\t\t\t\t\tsrcset=\"https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/What-Are-UPI-Transaction-Mistake-poster-page.jpg 640w, https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/What-Are-UPI-Transaction-Mistake-poster-page-105x140.jpg 105w, https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/What-Are-UPI-Transaction-Mistake-poster-page-311x414.jpg 311w, https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/What-Are-UPI-Transaction-Mistake-poster-page-149x199.jpg 149w, https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/What-Are-UPI-Transaction-Mistake-poster-page-60x80.jpg 60w, https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/What-Are-UPI-Transaction-Mistake-poster-page-150x200.jpg 150w\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tsizes=\"auto, (max-width: 640px) 100vw, 640px\"\n\t\t\t\t\t\t\t\t\t\t\t\tloading=\"lazy\"\n\t\t\t\t\t\tdecoding=\"async\"\n\t\t\t\t\t>\n\t\t\t\t<\/a>\n\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<div\n\t\t\t\tclass=\"web-stories-list__story\"\n\t\t\t\tdata-wp-interactive=\"web-stories-block\"\n\t\t\t\tdata-wp-context='{\"instanceId\":1}'\t\t\t\tdata-wp-on--click=\"actions.open\"\n\t\t\t\tdata-wp-on-window--popstate=\"actions.onPopstate\"\n\t\t\t\t>\n\t\t\t\t\t\t\t<div class=\"web-stories-list__story-poster\">\n\t\t\t\t<a href=\"https:\/\/in.nttdatapay.com\/blog\/web-stories\/book-tickets-on-irctc-with-international-debit-credit-cards\/\" >\n\t\t\t\t\t<img\n\t\t\t\t\t\tsrc=\"https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/Book-Tickets-on-IRCTC-with-International-Debit-Credit-Cards-640x853.jpg\"\n\t\t\t\t\t\talt=\"Book Tickets on IRCTC with International Debit &#038; Credit Cards\"\n\t\t\t\t\t\twidth=\"185\"\n\t\t\t\t\t\theight=\"308\"\n\t\t\t\t\t\t\t\t\t\t\t\t\tsrcset=\"https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/Book-Tickets-on-IRCTC-with-International-Debit-Credit-Cards.jpg 640w, https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/Book-Tickets-on-IRCTC-with-International-Debit-Credit-Cards-105x140.jpg 105w, https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/Book-Tickets-on-IRCTC-with-International-Debit-Credit-Cards-311x414.jpg 311w, https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/Book-Tickets-on-IRCTC-with-International-Debit-Credit-Cards-149x199.jpg 149w, https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/Book-Tickets-on-IRCTC-with-International-Debit-Credit-Cards-60x80.jpg 60w, https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/Book-Tickets-on-IRCTC-with-International-Debit-Credit-Cards-150x200.jpg 150w\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tsizes=\"auto, (max-width: 640px) 100vw, 640px\"\n\t\t\t\t\t\t\t\t\t\t\t\tloading=\"lazy\"\n\t\t\t\t\t\tdecoding=\"async\"\n\t\t\t\t\t>\n\t\t\t\t<\/a>\n\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<div\n\t\t\t\tclass=\"web-stories-list__story\"\n\t\t\t\tdata-wp-interactive=\"web-stories-block\"\n\t\t\t\tdata-wp-context='{\"instanceId\":1}'\t\t\t\tdata-wp-on--click=\"actions.open\"\n\t\t\t\tdata-wp-on-window--popstate=\"actions.onPopstate\"\n\t\t\t\t>\n\t\t\t\t\t\t\t<div class=\"web-stories-list__story-poster\">\n\t\t\t\t<a href=\"https:\/\/in.nttdatapay.com\/blog\/web-stories\/how-to-create-a-payment-gateway-api\/\" >\n\t\t\t\t\t<img\n\t\t\t\t\t\tsrc=\"https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/How-To-Create-a-Payment-Gateway-api-poster-page-640x853.jpg\"\n\t\t\t\t\t\talt=\"How To Create a Payment Gateway API?\"\n\t\t\t\t\t\twidth=\"185\"\n\t\t\t\t\t\theight=\"308\"\n\t\t\t\t\t\t\t\t\t\t\t\t\tsrcset=\"https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/How-To-Create-a-Payment-Gateway-api-poster-page.jpg 640w, https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/How-To-Create-a-Payment-Gateway-api-poster-page-105x140.jpg 105w, https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/How-To-Create-a-Payment-Gateway-api-poster-page-311x414.jpg 311w, https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/How-To-Create-a-Payment-Gateway-api-poster-page-149x199.jpg 149w, https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/How-To-Create-a-Payment-Gateway-api-poster-page-60x80.jpg 60w, https:\/\/in.nttdatapay.com\/blog\/wp-content\/uploads\/2024\/03\/How-To-Create-a-Payment-Gateway-api-poster-page-150x200.jpg 150w\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tsizes=\"auto, (max-width: 640px) 100vw, 640px\"\n\t\t\t\t\t\t\t\t\t\t\t\tloading=\"lazy\"\n\t\t\t\t\t\tdecoding=\"async\"\n\t\t\t\t\t>\n\t\t\t\t<\/a>\n\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<div tabindex=\"0\" aria-label=\"Previous\" class=\"glider-prev\"><\/div>\n\t\t\t\t\t<div tabindex=\"0\" aria-label=\"Next\" class=\"glider-next\"><\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\r\n<h2><span style=\"font-weight: 400;\">What is UPI Interchange Fee?<\/span><\/h2>\r\n<p><span style=\"font-weight: 400;\">UPI interchange fee refers to transaction charges paid by merchants to payment processors or banks for accepting card-based or digital payments from their customers. It is usually a percentage of the transaction value.<\/span><\/p>\r\n<h2><span style=\"font-weight: 400;\">Working of UPI Interchange Fees<\/span><\/h2>\r\n<p><span style=\"font-weight: 400;\">In March 2023, NPCI proposed interchange fees of up to 1.1% for select UPI merchant transactions of Rs. 2000 or more made via wallets. The fees are only applicable to high-value transactions completed using PPIs at merchant locations. Regular person-to-person and person-to-merchant UPI <a href=\"https:\/\/in.nttdatapay.com\/blog\/safe-and-secure-imps-bank-transfers\/\">bank transfers<\/a> remain free of cost. Customers will not pay any surcharges, as the interchange is collected behind the scenes.<\/span> <span style=\"font-weight: 400;\">While larger merchants may see a minor cost increase, most are unlikely to pass this on to customers. The nominal rates aim to promote continued UPI adoption without impacting users. Wallets now have funding to push merchant acquisition and innovation.<\/span><\/p>\r\n<p><span style=\"font-weight: 400;\">Overall, the move secures UPI&#8217;s leadership in supporting India&#8217;s digital revolution.<\/span> <span style=\"font-weight: 400;\">For credit and debit card transactions, interchange fees help offset costs incurred by issuers in providing cards to customers and managing associated risks. Processors collect these fees from acquirers who facilitate merchant payments. <\/span><\/p>\r\n<p><span style=\"font-weight: 400;\">This fee structure allows card networks to remain financially viable while encouraging greater acceptance points.<\/span> <span style=\"font-weight: 400;\">Similarly, interchange fees aim to balance revenue streams for all participants in a digital payment system. They promote interoperability and shared infrastructure usage. However, fees must remain nominal to not negatively impact merchant acceptance or user experience.<\/span><\/p>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td><strong><em>Key points about the UPI interchange fee structure<\/em><\/strong>\r\n<ul>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><em><span style=\"font-weight: 400;\">Applicable only on PPI-based merchant transactions of Rs. 2000 or more.<\/span><\/em><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><em><span style=\"font-weight: 400;\">The fee rate depends on the merchant category &#8211; 0.5-1.1% range.<\/span><\/em><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><em><span style=\"font-weight: 400;\">No impact on bank-to-bank or peer-to-peer UPI payments.<\/span><\/em><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><em><span style=\"font-weight: 400;\">Wallet issuers to pay 15 bps for wallet loads over Rs. 2000.<\/span><\/em><\/li>\r\n<\/ul>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<h2><span style=\"font-weight: 400;\">Impact on Payment Service Providers\u00a0<\/span><\/h2>\r\n<ul>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">For <\/span><a href=\"https:\/\/in.nttdatapay.com\/blog\/how-digital-payments-help-your-business-grow\/\"><span style=\"font-weight: 400;\">digital wallet<\/span><\/a><span style=\"font-weight: 400;\"> firms, interchange fees address concerns about the lack of a viable business model. It incentivises them to drive merchant acquisition aggressively.\u00a0<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Fees collected can offset costs incurred in onboarding merchants and customers, managing risks, ensuring compliance, and more. This makes wallet-based payments sustainable in the long run.<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Banks also gain via wallet load charges. Currently, they miss out on potential fee income as customers use wallets without involving banks. The new structure addresses this imbalance.<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Overall, fees open up an avenue for payment providers to generate steady income streams from transaction volumes. This encourages continued product innovation and service improvements.<\/span><\/li>\r\n<\/ul>\r\n<h2><span style=\"font-weight: 400;\">Impact on Merchants<\/span><\/h2>\r\n<ul>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Merchant acquirers may pass on a portion of interchange fees to medium and large merchants. Smaller shopkeepers are exempt due to low transaction values.\u00a0<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">While larger merchants bear more wallet-based transactions, fees remain nominal at under 2% in most cases. Many may choose to absorb costs to boost volumes.\u00a0<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Alternatively, some merchants could consider minimal surcharges for high-value wallet payments. But this risks frustrating customers and should be a last resort.\u00a0<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Overall, the nominal fee rates are unlikely to impact most merchant businesses significantly.\u00a0<\/span><\/li>\r\n<\/ul>\r\n<h2><span style=\"font-weight: 400;\">Impact on Customers\u00a0<\/span><\/h2>\r\n<ul>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><i><span style=\"font-weight: 400;\">The key takeaway is customers will not pay any additional charges for making UPI transactions as before.<\/span><\/i><span style=\"font-weight: 400;\"> Interchange fees are collected from merchant acquirers by wallet issuers behind the scenes.<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Customers can continue using their preferred wallet or bank account freely for UPI payments. The experience remains seamless with zero switching costs.<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This protects adoption while addressing long-term sustainability concerns. It ensures UPI remains people-centric in line with NPCI&#8217;s vision.<\/span><\/li>\r\n<\/ul>\r\n<h2><span style=\"font-weight: 400;\">Make Your Online Transactions Seamless with NTT DATA Payment Services<\/span><\/h2>\r\n<p><span style=\"font-weight: 400;\">UPI interchange fees plays a significant role in keeping this UPI framework in place by allowing seamless online payments from customers and empowering businesses, leading India&#8217;s digital payments revolution to even greater heights in the coming years. As a leading payment solutions provider in India, NTT DATA processes millions of UPI transactions every day for merchants across various industries.\u00a0<\/span><\/p>\r\n<p><a href=\"https:\/\/www.nttdatapay.com\/\" target=\"_blank\" rel=\"noopener\">NTT DATA Payment Services <\/a>offers a complete payment solution to advance both your offline and online businesses from,<\/p>\r\n<ul>\r\n<li><a href=\"https:\/\/www.nttdatapay.com\/online-payment-gateway-india\" target=\"_blank\" rel=\"noopener\">Online Payment Gateway<\/a><\/li>\r\n<li><a href=\"https:\/\/www.nttdatapay.com\/swipecard-pos-machine\" target=\"_blank\" rel=\"noopener\">POS machines<\/a><\/li>\r\n<li><a href=\"https:\/\/www.nttdatapay.com\/ivr-payment-system\" target=\"_blank\" rel=\"noopener\">IVR payments<\/a><\/li>\r\n<li>Mobile applications, and<\/li>\r\n<li><a href=\"https:\/\/in.nttdatapay.com\/blog\/bharat-qr-code-how-it-works-and-benefits\/\">Bharat QR Scan and Pay<\/a><\/li>\r\n<\/ul>\r\n<p>We\u00a0ensure maximum comfort, convenience, and safety for all your payments.<\/p>\r\n<h2><span style=\"font-weight: 400;\">Empowering Businesses without Affecting Customers through UPI Interchange<\/span><\/h2>\r\n<p><span style=\"font-weight: 400;\">The interchange fees for certain UPI merchant transactions is a balanced approach by NPCI to foster long-term sustainability and continued innovation in India&#8217;s digital payments ecosystem. While nominal fees will be collected from merchant acquirers, everyday customers can continue enjoying free and seamless UPI experiences.\u00a0<\/span><\/p>\r\n<p><span style=\"font-weight: 400;\">By providing a viable revenue stream for payment service providers, interchange fees incentivise further investment in merchant acquisition and product development. This will strengthen UPI infrastructure and help expand acceptance nationwide.\u00a0<\/span><\/p>\r\n<p><span style=\"font-weight: 400;\">The fee structure promotes greater interoperability between bank accounts and digital wallets on UPI. This enhances convenience for users while driving greater financial inclusion across India.\u00a0<\/span><\/p>\r\n<!-- \/wp:post-content -->\r\n\r\n<!-- wp:table -->\r\n<figure class=\"wp-block-table\">\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td style=\"text-align: center;\"><em>Also, you can get frequent updates on <a href=\"https:\/\/www.instagram.com\/nttdatapayments\/\" target=\"_blank\" rel=\"noopener\">nttdatapayments<\/a> Instagram page.<\/em><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/figure>\r\n<h2 style=\"text-align: center;\"><span style=\"font-weight: 400;\">UPI Interchange Fee: FAQs<\/span><\/h2>\r\n<h4><strong>1. What is the interchange fee for UPI payments?<\/strong><\/h4>\r\n<p><span style=\"font-weight: 400;\">The National Payments Corporation of India (NPCI) has introduced an interchange fee structure for certain <a href=\"https:\/\/in.nttdatapay.com\/blog\/upi-transaction-mistake\/\">UPI merchant transactions made<\/a> via prepaid payment instruments (PPI) like wallets. The fee will be in the range of 0.5-1.1% of the transaction value and applicable only on transactions of Rs. 2000 or more with specified merchant categories.<\/span><\/p>\r\n<h4><strong>2. Who benefits from UPI interchange fees?\u00a0<\/strong><\/h4>\r\n<p><span style=\"font-weight: 400;\">UPI interchange fees are expected to generate a steady revenue stream for payment service providers like digital wallets to help offset costs and remain financially sustainable in the long run. It also provides banks with an incentive to drive merchant acquisition and adoption of <a href=\"https:\/\/in.nttdatapay.com\/blog\/how-to-create-a-upi-payment-link-and-collect-payment\/\">UPI payment<\/a> services.<\/span><\/p>\r\n<h4><strong>3. What transactions are exempt from UPI interchange fees?<\/strong><\/h4>\r\n<p><span style=\"font-weight: 400;\">Peer-to-peer (P2P) transactions between individuals and transactions below Rs. 2000 with small merchants are exempt from UPI interchange fees. The fees only apply to high-value merchant transactions conducted via prepaid payment instruments.\u00a0<\/span><\/p>\r\n<h4><strong>4. What is the difference between an interchange fee and a processing fee?<\/strong><\/h4>\r\n<p><span style=\"font-weight: 400;\">While interchange fees are charges merchants pay to payment providers, processing fees are charges merchants pay to payment gateways\/acquirers for facilitating transactions. Interchange fees aim to balance revenue streams for payment networks.<\/span><\/p>\r\n<h4><strong>5. How do UPI interchange fees impact merchants and customers?\u00a0\u00a0<\/strong><\/h4>\r\n<p><span style=\"font-weight: 400;\">For most merchants, the nominal interchange fee rates of 0.5-1.1% are unlikely to impact businesses significantly. Larger merchants may pass on costs selectively. Customers continue enjoying free P2P UPI experiences as fees are implemented behind the scenes without any additional charges for users. \u00a0 <\/span><\/p><!-- AddThis Advanced Settings generic via filter on the_content --><!-- AddThis Share Buttons generic via filter on the_content -->","protected":false},"excerpt":{"rendered":"<p>The National Payments Corporation of India (NPCI) recently introduced an interchange fee structure for Unified Payments Interface (UPI) transactions made through prepaid payment instruments (PPIs) like digital wallets.\u00a0 But what&#8230; <!-- AddThis Advanced Settings generic via filter on get_the_excerpt --><!-- AddThis Share Buttons generic via filter on get_the_excerpt --><\/p>\n","protected":false},"author":1,"featured_media":4751,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17],"tags":[106],"class_list":["post-3977","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-upi-interchange-fee"],"_links":{"self":[{"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/posts\/3977","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/comments?post=3977"}],"version-history":[{"count":7,"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/posts\/3977\/revisions"}],"predecessor-version":[{"id":4333,"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/posts\/3977\/revisions\/4333"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/media\/4751"}],"wp:attachment":[{"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/media?parent=3977"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/categories?post=3977"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/in.nttdatapay.com\/blog\/wp-json\/wp\/v2\/tags?post=3977"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}