Will Customers Now Pay 1.1% Fee on UPI Transactions? No, the Claim Is Misleading

Only merchants will pay 1.1 percent fee on UPI transactions of Rs 2000 or more, customers won't be charged extra.

Fact-Check: A misleading claim about customers being charged an additional fees of 1.1 percent on UPI transactions is going viral on social media.

(Photo: Altered by The Quint)

Several social media users have claimed that Unified Payments Interface (UPI) is no longer free and will charge a 1.1 percent fee to all its customers of UPI transactions of Rs 2000 or above.

The claim also states that this new rule will come in action from 1 April.

(Swipe to check all screenshots.)

An archive can be seen here.

An archive can be seen here.

An archive can be seen here.

(We also received a query about this claim on our WhatsApp tipline.)

But who will really pay a 1.1 percent interchange fee?: The National Payment Corporation of India (NPCI) has clarified that the customer won't be charged a 1.1 percent fee, as claimed.

• NPCI also stated that starting from 1 April, interchange fees, a fee charged by one bank to another bank for processing a transaction, will be charged only to merchant transactions above Rs 2000 made through Prepaid Payment Instruments (PPI).

• PPI transactions include UPI transactions made via wallets and credit cards.

Official circular of NPCI: The official circular by NPCI clearly states that these PPI charges will be levied only on merchant transactions.

• It adds that 1.1 percent of the transaction fee will be appiled to payments made to merchants with a transactional amount of Rs 2000 or above.

• It also states that this interchange fee will not apply to peer-to-peer (P2P) or peer-to-peer-merchant (P2PM) transactions.

• The document also states that this fee will be charged from 1 April and will be reviewed by 30 September 2023.

Screenshot from NPCI's circular.

(Source: NPCI/ Screenshot altered by The Quint)

• Further in the document, NPCI also states that the interchange fees will fall in the range of 0.5 to 1.1 percent.

• There is a different amount of fees ranging from 0.5 percent on fuel; 0.7 percent on telecom, utilities/post office, education, and agriculture; 0.9 percent for supermarkets and 1 percent for mutual funds, government, insurance and railways.

Screenshot from NPCI's circular about fee range.

(Source: NPCI/ Screenshot)

The fee ranges from 0.5 to 1.1 percent for different merchant transactions. 

(Source: NPCI/ Screenshot)

• NPCI also shared a clarification on Twitter on 29 March.

• It shared a press release that clarified that customers wouldn't have to pay any fee on UPI transactions as they are only applicable to PPI merchange transactions.

Clarification from NPCI. 

(Source: NPCI/ Screenshot altered by The Quint)

Paytm's clarification on the matter: Patym, an application for online payments, also tweeted to dismiss the claim about customers paying an additional 1.1 percent fee on their UPI transactions.

An archive can be seen here.

(Source: Twitter/Screenshot)

Conclusion: A misleading claim about customers being charged an additional fees of 1.1 percent on UPI transactions is going viral on social media.

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