Paytm: NPCI revised TPAP & payer PSP fees

The National Payments Corporation of India (NPCI) has revised transaction processing and authorization provider (TPAP) fees and payer Payment Service Provider (PSP) charges under the Unified Payments Interface (UPI) framework, effective March 2026. These adjustments primarily target high-value transactions involving Prepaid Payment Instruments (PPIs), such as digital wallets, with interchange fees of up to 1.1% applied to UPI transactions exceeding ₹2,000. The revisions aim to ensure the financial sustainability of the UPI ecosystem while maintaining zero-cost transactions for most end-users.

For consumers, UPI payments from bank accounts or RuPay credit cards remain free, as mandated by the government since January 1, 2020. Similarly, transactions below ₹2,000 using PPI wallets are unaffected. The interchange fee is borne by the merchant's acquirer, which may choose to pass it on to the merchant, though this is not mandatory. Paytm, a major UPI participant, clarified that its users face no additional charges for standard UPI transactions, emphasizing that the policy change applies only to backend settlements between payment providers.

The NPCI's circular also standardizes wallet interoperability, enabling PPI users to transact across all UPI-enabled merchants. Paytm's CEO, Vijay Shekhar Sharma, highlighted that the revisions align with RBI's vision to expand UPI's payment sources while preserving consumer benefits. Merchants accepting UPI payments retain flexibility to choose payment instruments, with no direct impact on small businesses or routine transactions.

These adjustments reflect NPCI's efforts to balance ecosystem growth with cost recovery for infrastructure and security, ensuring UPI remains accessible and scalable for India's digital economy.