NPCI charges are the fees the National Payments Corporation of India levies on banks, wallet providers, and other member institutions for processing transactions through the payment systems it runs, including UPI, RuPay, IMPS, the National Financial Switch for ATMs, AePS, and NACH. For everyday users, the practical headline is that bank-account UPI payments and RuPay debit card purchases carry no direct fee. Most other NPCI fees sit between financial institutions and never appear on your statement. A few, such as IMPS charges and out-of-network ATM withdrawals, are passed through by your bank.
UPI: Free for Bank Accounts, Fees Only on Wallet Payments Above ₹2,000
Person-to-person and person-to-merchant UPI transactions funded directly from a bank account are free for both sender and receiver.1ClearTax. UPI Transaction Charges There is no Merchant Discount Rate on these payments. The zero-MDR framework has been in force since January 1, 2020, under Section 10A of the Payment and Settlement Systems Act, which bars banks and system providers from charging for payments made through prescribed electronic modes, specifically UPI and RuPay debit cards.2Reserve Bank of India. Discussion Paper on Charges in Payment Systems
Behind the scenes, NPCI does charge member banks a switching fee for processing each UPI transaction, though the per-transaction amount is not publicly disclosed. NPCI currently gives banks a 50% rebate on net switching fees for UPI person-to-merchant transactions, reconciled daily through its Unified Reconciliation and Clearing System, and the rebate continues until NPCI formally withdraws it.3TeamLease RegTech. NPCI Notified Regarding the Implementation of Switching Fee Rebate4Ricago. NPCI UPI Circular 230A
Wallet (PPI) Interchange
The one place UPI carries an interchange fee is merchant payments made through prepaid payment instruments, meaning digital wallets. Since April 1, 2023, NPCI has required an interchange on wallet-funded merchant payments above ₹2,000.5IBS Intelligence. Merchant Transactions via UPI Get Costly After NPCI Imposes Charges The rate runs from 0.5% to 1.1% of the transaction, depending on merchant category, with fuel pumps at the low end and general online merchants near the top.6Ikigai Law. Explainer on Fees for UPI Payments via Wallets The customer does not pay this fee. It is borne by the merchant’s acquiring bank, which typically recovers it through the Merchant Discount Rate charged to the merchant.
Peer-to-peer transfers, payments between bank accounts, and small-merchant transactions where expected monthly inward UPI volume is under ₹50,000 are all exempt.6Ikigai Law. Explainer on Fees for UPI Payments via Wallets Separately, when a user loads more than ₹2,000 into a wallet via UPI, the wallet issuer pays a 15 basis point service charge to the customer’s bank.5IBS Intelligence. Merchant Transactions via UPI Get Costly After NPCI Imposes Charges
RuPay Card Interchange Fees
NPCI sets the interchange fee that a merchant’s bank pays to the card-issuing bank on RuPay transactions. Rates were revised effective May 1, 2025, under NPCI notification NPCI/2024-25/RuPay/032.7TeamLease RegTech. NPCI Notified Regarding RuPay Credit Interchange
For RuPay credit cards on domestic purchases:
- Classic cards: 1.10% at physical point-of-sale terminals, and 1.60% online.
- Platinum cards: up to 1.85% for certain merchant categories.
- Select cards: up to 2.02% for certain merchant categories.
International transactions carry separate rates, including a flat $1.10 per ATM withdrawal and point-of-sale interchange from 1.20% on Classic to 2.00% on Select cards.8Economic Times. Transaction Cost on RuPay Credit Card May Rise for These Merchants GST is applied on top using a multiplier of 1.1092. The cardholder does not directly pay any of this, though merchants factor the cost into their pricing.
RuPay debit cards used at the point of sale fall under the zero-MDR mandate and carry no interchange for bank-funded payments.2Reserve Bank of India. Discussion Paper on Charges in Payment Systems
IMPS Charges
Unlike UPI, banks are allowed to charge customers for IMPS transfers, and most do. HDFC Bank’s schedule, for example, is ₹2.50 plus GST for transfers up to ₹1,000, ₹5 plus GST for transfers between ₹1,000 and ₹1 lakh, and ₹15 plus GST above ₹1 lakh. Inward IMPS transactions are free.9HDFC Bank. IMPS Fees and Charges These customer-facing charges vary bank to bank and are separate from the switching fees NPCI collects from the banks themselves.
ATM Withdrawals Through the National Financial Switch
NPCI runs the National Financial Switch, which processes interbank ATM transactions. Effective May 1, 2025, the interchange fee that your bank pays to the ATM-owning bank is ₹19 per financial transaction and ₹7 per non-financial transaction such as a balance inquiry. The RBI caps what your bank can charge you for out-of-network ATM use beyond your free monthly quota at ₹23 per transaction.10Deccan Chronicle. ATM Transaction Cost to Go Up by Rs 2 to Rs 23 From May 1
AePS Interchange
For Aadhaar-based fund transfers processed at business-correspondent outlets, NPCI moved in June 2023 from a percentage-based interchange (0.5% capped at ₹15) to a flat ₹0.25 per transaction. Transfers under ₹100 are exempt.11MediaNama. AePS Fixed Interchange Fee
NACH Mandate Maintenance
NACH handles recurring debits and credits like loan EMIs, salary deposits, and insurance premiums. NPCI charges participating banks a mandate maintenance fee. An active mandate costs ₹0.50 per year. Dormant mandates, defined as those with no transactions for more than six months, cost progressively more: ₹1 in the first year of dormancy, ₹2 in the second and third years, ₹3 in the fourth and fifth, and ₹5 per year from the sixth year onward.12Juspay. NPCI NACH Mandate Maintenance Charges These charges are calculated at the end of each financial year in March.
Bill Payment Platform Fees Are Not Allowed on BBPS
In August 2022, several payment apps including Paytm and PhonePe began adding small platform fees, some as low as ₹1, to bill payments made through the Bharat Bill Payment System. NPCI directed the apps that same month to stop charging such fees on BBPS transactions.13Times of India. NPCI Directs Apps Not to Charge Bill Payment Fees Paytm discontinued the charge immediately, and PhonePe paused fees across BBPS categories, though it continued charging on certain direct-biller connections outside the BBPS framework, such as some credit card payments and mobile recharges.14Business Standard. Stop Charging Platform Fee on BBPS Payments NPCI Directs Payment Apps The upshot for users: fees appearing on a bill payment inside a UPI app are only permissible if the transaction is not routed through BBPS.
Why UPI Stays Free, and Who Pays for It
The zero-MDR rule leaves banks and payment service providers to cover UPI costs without direct fee revenue. The government runs an incentive scheme for UPI and RuPay debit card transactions to partially offset those costs. Actual disbursement was ₹1,923 crore in FY 2024-25, revised estimates for FY 2025-26 stand at ₹2,196 crore, and the budget estimate for FY 2026-27 is ₹2,000 crore.15Economic Times BFSI. Union Budget 2026 Govt Raises UPI RuPay Incentives to Rs 2000 Crore Industry estimates suggest the incentive covers roughly 11% of actual operational costs and about 14% of what MDR revenue would have been in the absence of the zero-charge rule.16New Indian Express. Monetize or Not Governments UPI Dilemma The RBI has argued the zero-MDR policy is unsustainable and floated proposals to allow some form of charging, including a 2022 discussion paper on the question.17Ikigai Law. RBI Paper on Payment Charges Reignites Debate Over Zero MDR Policy The Finance Ministry has held its position that UPI is a digital public good and should remain free. No policy change has been announced.