National Payments Corporation of India Research on certain fees

Payment Service Provider (PSP) Fee: A PSP is the payment enabler that acts as a connection
between a business and its customers. It helps the business accept online payments via multiple
payment modes like credit cards, debit cards, UPI, net banking, to name a few. Also, it is the
PSP’s responsibility to ensure the security of every payment transaction held between the
business and its customers. PSP fee is simply the fee charged by the PSPs to process digital
payments for the business. It varies from one service provider to another.
Interchange Fee: In each transaction involving three parties, the funds get transferred from
the issuing bank (which issues a credit or debit card) to the acquiring bank (where amount is
transferred), while the process is facilitated by the issuing institution (institutions like VISA).
An interchange fee is an amount that the issuing institutions pay to the issuing bank after
collecting the same amount from the acquiring bank. It is defined as the percentage of the total
transaction amount along with a fixed charge
Switching Fee: Switch fee is the fee paid by banks to network operators, such as NPCI.
Merchant Discount Rate: Merchant Discount Rate refers to the rate at which the merchants
are charged for accepting payments made via credit cards, debit cards, net banking, and digital
wallets. The merchants must agree to this rate defined by the payment service providers and
set up the service before accepting digital payments.
NPCI Circulars dealing with the above-mentioned terms:
Type of Fee Detail Date Link/Circular No.

Interchange Fee NFS ATM Network- 27th July 2021 accessible here.
Revision of
Interchange fee (27th
July 2021).
Revision in Date unavailable Link unavailable
interchange fee for (IMPS Circular 106,
IMPS transaction. 2021)
Interchange fees for 18th August 2016 accessible here.
interoperable cash
deposit (ICD) in
National Financial
Switch (NFS) (18th
August, 2016).
Revision of Date unavailable Link unavailable
Interchange Fees (NFS OC 403 NFS
ATM Network,
2009).
Interchange fees for Date unavailable Link unavailable
interoperable cash (NFS OC 219, 2016).
deposit in NFS
Interchange Fees for Date unavailable Link unavailable
Value Added Services (NFS OC 171, 2015).
(VAS) in NFS
 Interchange Fees for Date unavailable Link unavailable
new VAS transactions (NFS OC 116, 2014).
Revision of Date unavailable Link unavailable
interchange rates in (NFS OC 65, 2012).
NFS network
Switching 17th February Link unavailable
Fee/Interchange 2017 (NPCI/2016-
applicable for AePS 17/AEPS/01-Circular
and eKYC 15).
Consolidated circular 3rd May 2017 Link unavailable
on Switching Fee/ (NPCI/2017-
Interchange/ MDR on 18/AEPS/01 -
Aadhaar Based Circular 18a)
Transaction, Card +
PIN on MicroATM
and BHIM Aadhaar
Pay.
Increase in the Upper Date unavailable Link unavailable
Cap per IMPS (IMPS Circular 64,
transaction to 5 Lacs 2015).
& Corresponding
Interchange &
Switching fee
effective 15 Dec 2015.
Waiver of Interchange 30th May, 2014 accessible here.
Fee for APB and EBT
Transactions
Switching Fee Increase in the Upper Date unavailable Link Unavailable
Cap per IMPS (IMPS Circular 64,
transaction to 5 Lacs 2015).
& Corresponding
Interchange &
Switching fee
effective 15 Dec 2015.
Revision in Switching Date unavailable Link unavailable
fees for IMPS rails (IMPS Circular 101,
Foreign Inward 2021)
Remittances.
Revision in NFS Date unavailable Link unavailable
ATM Switching Fees (NFS OC 161, 2015).
Reduction in NFS Date unavailable Link unavailable
ATM Switching Fees (NFS OC 266, 2017).
Reduction in NFS Date unavailable Link unavailable
ATM Switching Fees (NFS OC 309, 2018).
Implementation of 28th September, accessible here.
switching fee for 2016
AEPS and eKYC
 from October 01,
2016
Implementation of 29th September accessible here.
switching fee for 2016
AEPS and eKYC
from April 01, 2016
Consolidated Circular 22nd March 2016 Link unavailable
on Switching Fees for (NPCI/2015-
AePS, eKYC, and 16/AEPS/01 -
Card+PIN on Circular 1, 2016).
MicroATM.
Consolidated circular 3rd May 2017 Link unavailable
on Switching Fee/ (NPCI/2017-
Interchange/ MDR on 18/AEPS/01 -
Aadhaar Based Circular 18a).
Transaction, Card +
PIN on MicroATM
and BHIM Aadhaar
Pay.
Switching 17th February Link unavailable
Fee/Interchange 2017 (NPCI/2016-
applicable for AePS 17/AEPS/01-Circular
and eKYC. 15).
Switching Fees for e- Date unavailable Link unavailable (e-
RUPI B2C voucher. RUPI OC No. 2,
2021).
Payment Service UPI recommendations 1st December, accessible here.
Provider (PSP) Fee to simplify the UPI 2016
PSP Apps for
seamless customer
onboarding
Parent PSP App to 28th August, accessible here.
support 2018
interoperability
compliance for their
P2M only Apps
Changes in PSP & 25th July, 2018 accessible here.
Customer
Communication to
prevent fraudulent
transactions
Guidelines for multi- 2nd March, 2020 accessible here.
bank model and
migration from single
bank to multibank
PSP model
Merchant Discount Consolidated circular 3rd May 2017 Link unavailable
Rate (MDR) on Switching Fee/ (NPCI/2017-
Interchange/ MDR on
Aadhaar Based 18/AEPS/01 -
Transaction, Card + Circular 18a).
PIN on MicroATM
and BHIM Aadhaar
Pay.
Implementation of 28th December, accessible here.
Small Merchant 2018
Indicator in
Production
Environment