From April 1, you will have to pay a 1.1 % charge on your unified payment
interface (UPI) transactions that are above Rs. 2000 if you use Prepaid Payment
Instruments (PPI).
Read more to know how it
will impact you...
UPI or Unified Payment
Interface is a way to transfer money from one bank account to another using a
mobile phone. PPI or Prepaid Payment Instruments are digital wallets that can
be used to make payments.
So, when you want to
transfer money to someone using UPI, you first need to link your bank account
to a UPI app on your phone. Then, you need to enter the recipient's UPI ID or
virtual payment address and the amount you want to transfer. Once you confirm
the details, the money will be deducted from your bank account and credited to
the recipient's bank account instantly.
But, if you don't want to
use your bank account directly, you can also use a PPI like Paytm or PhonePe to
make the transaction. In this case, you need to link your bank account to the
PPI app and add money to your PPI wallet. Then, you can use the PPI wallet
balance to make UPI transactions.
So, that's how UPI
transactions work using PPI. It's a quick and convenient way to transfer money
using your mobile phone.
A P2M and
P2P transaction is exempt, which means there will be no charge on your small
purchases or peer to peer money transfer.
Interchange at the rate of
1.1 per cent of the transaction value/amount (using prepaid payment
instruments, or PPI) shall apply to payments made to all online merchants,
large merchants and small offline merchants having transaction value/ amount
greater than Rs 2,000.
PPI issuer will have to
pay 15 bps as a wallet loading service charge to the remitter bank for loading
transaction value which is greater than Rs 2,000.
The
interchange rate of 1.1% won't be charged for transactions between a bank
account and a PPI wallet that involve peer-to-peer (P2P) or
peer-to-peer-merchant (P2PM) transfers.
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