From April 1, 2023, people will have to pay extra charges for making payments through UPI! This news spread like a wild fire and it started being discussed on all social media platforms. The general public started calling it inflation and started cursing the government.
People started sending WhatsApp messages that they would have to pay extra for transactions above Rs 2,000 through digital wallets like Paytm, Phone Pay and Google Pay. This is true, but there is no need to take tension. If you link UPI payment with bank account, then you have not suffered any loss. This extra charge will not be applicable on UPI but only on PPI.
What is PPI payment
The full form of PPI is Prepaid Payment Instrument. In UPI payment where all the money from one bank account goes to another bank account, in PPI payment the money does not go from bank to bank but from app to bank.
Explain in simple words, if you keep money in your payment app’s wallet and then scan the QR code and send that money through UPI to another person’s account, then it comes under the category of prepaid payment instrument. Companies like Paytm and PhonePe offer the option of PPI.
What is UPI payment
The full name of UPI is Unified Payments Interface. Which is operated by NPCI i.e. National Payments Corporation of India. In UPI payment, money is withdrawn from one bank account and goes to another bank account. UPI transaction can be done through any app platform. UPI ID or UPI QR code is required for successful payment
On which payment will the money be spent?
As per the proposal of NPCI, PPI transactions may have to pay extra charges. If UPI payment is made through any digital wallet or through credit card, then interchange fee may have to be paid for such transactions.
The maximum charge in this can be 1.1 percent of the amount paid. This charge will be applicable only if the payment is made more than Rs 2,000. Make it clear here that whatever extra charges it will have to be paid by the merchant receiving the payment and not by the payer.
