News Highlight
Earlier last week, the National Payments Corporation of India (NPCI), which governs UPI, in a circular issued directly to banks.
Key Takeaway
- The NPCI, which governs UPI, in a circular issued directly to banks, intimated that they can now levy charges on merchant transactions made through Prepaid Instrument wallets using UPI.
- After the information was leaked to the media, the NPCI clarified normal bank-to-bank UPI transactions.
- It will not be charged, and customers will not have to pay for transactions made via PPI on UPI.
- It said the new interchange charges only apply to Prepaid Payment Instruments (PPI) merchant transactions.
- The interchange fee, generally associated with card payments to cover the transaction cost, has now brought PPI wallets under its fold.
Will Customers Be Charged As Per NPCI Circular on UPI Charges?
- According to NCPI, who published a statement on the subject, customers will not be charged.
- These bank-to-bank transactions are still free for customers and merchants.
- According to recent regulatory recommendations, Prepaid Payment Instruments are now permitted to be a part of the interoperable UP ecosystem.
- As a result, PCI has now allowed PPI wallets to be a part of the interoperable UP ecosystem.
- Customers are not charged for the new interchange rates, which apply only to PP merchant transactions.
- It is also said that there are no fees for bank-account-to-bank account UPI payments.
- Users will be able to use any bank account, RuPay credit card, and prepaid wallets on UPI-enabled apps with this enhancement to UPI, according to NPCI.
National Payments Corporation of India (NPCI)
- About
- The National Payments Corporation of India (NPCI) is an umbrella organisation for retail payment operations in India.
- The Reserve Bank of India and the Indian Banks’ Association founded this institution.
- The Central Bank of India centrally pushed NPCI, established in December 2008.
- The Certificate of Business Beginning was issued in April 2009.
- Ten major promoter banks promote NPCI:
- State Bank of India
- Punjab National Bank
- Canara Bank
- Bank of Baroda
- Union Bank of India
- Bank of India
- ICICI Bank
- HDFC Bank
- Citibank
- HSBC
Functions of NPCI
- NPCI handles all retail payments in India.
- The RuPay card network, India’s domestic card network, is operated by NPCI.
- The Unified Payments Interface (UPI) is a real-time payment system that enables rapid transfers between bank accounts.
- NPCI is the National Automated Clearing House (NACH), an offline web-based system that handles bulk push and pulls transactions.
- NACH provides an electronic mandate platform for corporates and banks to register mandates, allowing paperless collection operations.
- It supports both account and Aadhaar-based transactions.
- NPCI manages the National Financial Switch (NFS).
- NFS is India’s largest network of shared ATMs, providing interoperable cash withdrawal, card-to-card money transfer, and interoperable cash deposit transactions, among other value-added services.
Products of NPCI
- RuPay
- It is an Indian domestic card scheme with a magnetic stripe and an EMV chip.
- The card, issued by 300 cooperative banks and Regional Rural Banks (RRBs) in India, is now accepted at all ATMs.
- National Common Mobility Card
- It is a contactless payment technology known as the Rupay Contactless card.
- Cardholders can use their card in contactless payment terminals without physically swiping or inserting them.
- Bharat Interface for Money (BHIM)
- Bharat Interface for Money (BHIM) is a mobile payment application based on the National Payments Corporation of India’s UPI.
- It allows you to send and receive money from other customers using UPI.
- Bharat Bill Payment System
- The Bharat Bill Payment System is a joint venture of the NPCI and the Reserve Bank of India (RBI) to pay all bills.
- It will offer its consumers an interoperable and accessible bill payment option.
The Unified Payments Interface (UPI)
- About
- On April 11, 2016, the Unified Payments Interface (UPI) was introduced as an instant inter-bank payment mechanism.
- This payment system was created to give a mobile platform for quick money transfers between two bank accounts.
- It is an immediate, real-time payment system that allows users to transfer money between various bank accounts in real-time without giving account information to the other party.
- It is an advanced version of the Immediate Payment Service (IMPS).
- UPI is a product of the National Payments Corporation of India (NPCI).
- The top UPI apps include PhonePe, Paytm, Google Pay, Amazon Pay, and BHIM.
Pic Courtesy: NPCI
Content Source: The Hindu