NPCI is reportedly plans to implement a 1.2% interchange fee on the credit line of UPI transactions.
According to sources, a circular outlining this change expected to released next week.
This move marks a significant shift in the UPI transaction landscape. It aiming to balance cost-effectiveness for users and profitability for service providers.
The proposed interchange fee of 1.2% will apply specifically to credit line transactions conducted through the Unified Payments Interface (UPI).
This fee structure anticipated to be lower than the interchange fees currently applied to traditional credit card transactions.
Earlier this year, NPCI had already initiated discussions on developing a more favorable interchange fee framework.
This decision was mainly focus on the promotion of UPI credit-based transactions at wider scope.
NPCI's decision to explore a new interchange fee structure is driven by several factors.
One of the primary motivations is to encourage the use of UPI for credit transactions.
By setting a lower interchange fee compared to credit cards, NPCI aims to make UPI a more attractive option for consumers and merchants alike.
This decision increase expectation in growth of usage and acceptance of UPI credit lines. It will help in enhancing the overall digital payments ecosystem in India.
As per NPCI data, the volume of UPI transactions in June stood at INR 20.07 Lakh Cr.
This figure represents a 1.9% decrease compared to May's transaction volume of INR 20.45 Lakh Cr.
Despite this slight decline, the year-on-year comparison reveals a robust growth trajectory, underscoring the rising popularity and trust in UPI as a preferred payment method.
The introduction of a 1.2% interchange fee on UPI credit line transactions carries significant implications for both consumers and merchants.
For consumers, this change may translate to more cost-effective credit-based transactions.
Lower interchange fees can lead to reduced transaction costs, making it more economical for users to leverage UPI for credit purposes.
For merchants, the new fee structure could enhance the attractiveness of accepting UPI payments.
Lower interchange fees mean reduced costs for merchants, potentially leading to higher profit margins and increased willingness to adopt UPI as a payment method.
This, in turn, could drive greater consumer adoption and create a positive feedback loop, further boosting the UPI ecosystem.
In short, The anticipated circular from NPCI will provide more clarity on the plans of 1.2% credit interchange fee.
As the digital payments landscape continues to evolve, such regulatory measures play a crucial role in financial transactions.
With the increasing shift towards cashless payments, NPCI's strategic initiatives are expected to drive sustained growth and innovation in the UPI ecosystem.
In conclusion, The decision of NPCI to proposed 1.2% interchange fee for credit marks a significant development.
By offering a more favorable fee structure, NPCI aims to promote the adoption of UPI for credit-based transactions, benefiting both consumers and merchants.
As we await the official circular, the potential impact of this change on the UPI ecosystem remains a topic of keen interest and anticipation.
Leave a Reply