Retail payments body National Payments Corporation of India has reduced charges on transactions up to Rs 1,000 on state-backed payments system Unified Payments Interface (UPI), from 25 to 10 paise, The Economic Times said, citing an NPCI note sent to banks and payment service providers. But the charges for transactions beyond Rs 1,000 remain at 50 paise.
To encourage cashbacks, charges on banks and payment service providers when they transmit refunds to customers have been brought down to 10 paise for all transactions. Earlier, banks and payment service providers had to pay 25 paise for transactions up to Rs 1,000 and 50 paise beyond that.
NPCI, which rolled out UPI in 2016, and upgraded it two years after, has also reduced charges on merchant transactions, by introducing a flat rate of 10 paise along with an ad valorem levy of 0.04% split between the acquiring bank and the issuing bank, said the note. (An ad valorem levy is based on the assessed value of an item.) Earlier, merchant transactions up to Rs 1,000 were charged 25 paise and beyond that 50 paise.
NPCI did not respond to queries till the time of publishing this story.
UPI transactions for March recorded an 18% increase month-on-month in transaction volume at 800 million transactions.
Google Pay and Flipkart-owned PhonePe have been aggressive in promoting UPI transactions involving cashbacks and offers.