No – as a consumer making a payment through UPI, you will not need to pay any fee for transactions above Rs. 2000. On 24 March 2023, the National Payments Corporation of India (NPCI) released a circular in which it recommended a 1.1 per cent interchange fee on merchant UPI transactions above Rs 2,000, made using prepaid payment instruments (PPI) like online wallets with effect from 1-Apr 2023.
According to NPCI, the interchange charges introduced will be applicable only for the PPI merchant transactions. It also clearly states that there will be no charge to customers. The interchange fee of 1.1 per cent will have no impact on the end-customer and UPI transactions will remain free for these charges – meaning that this charge is not to be borne by the customer.
How is PPI different from UPI payments?
UPI transactions are real-time transactions made between two bank accounts, whereas PPI transactions are transactions made through payment means like mobile wallets, gift cards which are prepaid payment instruments and not real-time bank account payments. UPI is primarily used for account-to-account transfer between two individuals and merchant payments, while PPIs are used mostly for bill payments, App and online shopping, and other transactions.
In summary, no charges are applicable for UPI transactions above Rs. 2000; the proposed interchange charges are applicable only for PPI mode payments, and that too to merchants only and not to customers.