MUMBAI: The National Payments Corporation of India (NPCI) has enabled the integration of digital wallets with the UPI platform, enabling wallet-holders to use their balances to pay any merchant with a QR code.
The UPI platform, which began with enabling account-to-account transfers, was recently opened up for credit card payments. The linking of digital wallets now facilitates the use of prepaid instruments (PPIs) for retail payments by scanning the ubiquitous UPI QR code. While the basic account-to-account transfers are free, payments using digital wallets would attract a merchant fee for payments of over Rs 2,000.
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The wallet issuer will get 1.1% interchange when wallet-holders pay on UPI. The issuers in turn will pay a 15-basis-point (100bps = 1 percentage point) fee to the banks when funds are transferred from any bank to the wallet. According to Morgan Stanley, Paytm, the largest wallet issuer, would get additional revenues and face some higher wallet-loading charges.
According to NPCI MD & CEO Dilip Asbe, UPI now provides the rails for all kinds of payments – bank accounts, credit and prepaid instruments. “This provides consumer choice to use the instrument in line with RBI’s principles of providing multiple options.”
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“Like credit pricing on UPI, small merchants will not pay any MDR for transactions up to Rs 2,000, while large merchants shall pay for all payments made using PPIs on UPI,” he said .
