New Delhi: In an unprecedented move by the government, now UPI payments made to merchants through prepaid instruments such as wallets or cards will attract an interchange fee of 1.1%.

According to a circular by UPI’s governing body National Payments Corporation of India (NPCI), transactions above Rs 2,000 to online merchants, large merchants and small offline merchants will attract a 1.1% interchange fee.

The circular also states that prepaid instrument (PPIs issuer) issuers will have to pay 15 basis points as fees to the remitter bank to load the transaction value above Rs 2,000.

As per the new instructions, Paytm is a PPIs issuer, the customer puts this money in the wallet from SBI account, then Paytm remitter bank will pay 15 bps to SBI to load the transaction.

Interchange fees are usually associated with card payments and are levied to cover the cost of the transaction.

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