The National Payments Corporation of India (NPCI), which runs the Unified Payments Interface (UPI) network, has slashed usage fees for small transactions to encourage banks and payment service providers (PSPs) to adopt the system, the Economic Times reported. The report said NPCI has reduced: charges on transactions up to Rs 1,000 from 25 paise to 10 paise while keeping the charge for transactions above Rs 1,000 unchanged at 50 paise. incentive payments to a flat 10 paise per transaction. Earlier, these were charged at the same rate as normal transactions. Incentive payments are charges banks or PSPs pay NPCI when they credit the user’s bank account with cashbacks. merchant transactions to flat 10 paise plus a 0.04% levy that will be split between the acquiring bank and the issuing bank. Merchant transactions up to Rs 1,000 earlier attracted at 25 paise fee, while those above Rs 1,000 were charged at 50 paise. Government withdrew UPI incentives last year In a surprising development last July, the central government withdrew several incentives for merchants and customers using UPI. It completely dropped an initiative under which merchants got up to Rs 1,000 for accepting payments using UPI, and replaced another scheme that gave customers cashbacks of up to Rs 500 with one that gave rewards of up to Rs 150, only to users of its BHIM payments app. UPI charges to hit customers soon While all these charges apply only to banks and PSPs, Kotak Mahindra Bank will soon become the first to charge…
