CosmicTaco

NPCI Likely to Announce 1.2% Interchange for Credit Line on UPI

CosmicTaco · 2024-07-10T18:02:51.243523+05:30

- NPCI is expected to set a 1.2% interchange fee for pre-sanctioned credit lines on UPI, with a circular likely next week. - The credit line will not be available for person-to-person transfers, focusing instead on merchant transactions. - Interchange fees are crucial for covering the risk and interest for the capital deployed by credit issuers. - Negotiations are ongoing between NPCI, banks, and UPI apps regarding revenue sharing, with TPAPs like PhonePe and Google Pay likely to get 0.08% commission. - The product has faced delays due to a lack of strong business cases, but NPCI mandates may drive adoption.

NPCI is expected to set a 1.2% interchange fee for pre-sanctioned credit lines on UPI, with a circular likely next week.
The credit line will not be available for person-to-person transfers, focusing instead on merchant transactions.
Interchange fees are crucial for covering the risk and interest for the capital deployed by credit issuers.
Negotiations are ongoing between NPCI, banks, and UPI apps regarding revenue sharing, with TPAPs like PhonePe and Google Pay likely to get 0.08% commission.
The product has faced delays due to a lack of strong business cases, but NPCI mandates may drive adoption.