Wallet and credit-on-UPI charges for merchants: PPI interchange, RuPay credit cards and credit lines

Not every payment that arrives through your UPI QR is an ordinary bank-account UPI payment. A customer can pay from a prepaid wallet (PPI), from a RuPay credit card linked to UPI, or from a pre-sanctioned credit line on UPI, and each follows different pricing. Since 1 April 2023, NPCI's framework has applied an interchange of up to 1.1% (lower in several categories) to wallet-funded P2M UPI payments above ₹2,000, which the acquirer usually recovers from the merchant. Credit-card and credit-line payments on UPI follow credit product rules, not the zero-charge or UPI MDR rules, according to the DFS/NPCI FAQ of 15 September 2026. The practical lesson: your effective UPI cost depends on how your customers fund their payments, so ask your acquirer for a breakdown. This guide belongs to the fees overview.

Four ways a customer can pay your UPI QR

Funding source	What it is	Merchant cost (as understood in Oct 2026)
Bank account via UPI	Ordinary UPI	Free up to ₹2,000 by law; 0.4% on select payments above ₹2,000 once NPCI implements UPI MDR
Wallet (PPI) via UPI	Customer pays from a prepaid wallet balance through interoperable UPI	PPI interchange on payments above ₹2,000 under NPCI's 2023 framework, passed on by your acquirer
RuPay credit card on UPI	Credit card linked to a UPI app	Credit card MDR as set in your agreement
Credit line on UPI	Pre-sanctioned credit from a bank, used through UPI	Credit product rules; ask your acquirer

PPI interchange: the 2023 framework

NPCI's circular effective 1 April 2023 introduced interchange on merchant UPI payments funded from PPIs. As reported at the time and repeated in later coverage:

Point	Detail
Applies to	P2M UPI payments made from a PPI (wallet), above ₹2,000
Headline rate	Up to 1.1%
Lower categories	Category-wise rates from about 0.5% (fuel) to 1% (for example some government, insurance, mutual fund and railway payments), with telecom, utilities, education and agriculture and supermarkets in between
Not applicable to	Ordinary bank-account UPI; P2P; P2PM payments
Wallet loading	PPI issuers pay the remitter bank a service charge of about 15 basis points on wallet loads above ₹2,000 (this is between banks, not a merchant fee)
Review	NPCI said the rates would be reviewed by 30 September 2023

Why it matters to merchants. Interchange is paid by the acquirer to the PPI issuer. Acquirers generally recover it through your MDR on those payments. If many customers pay from wallets, for example with cashback offers, your UPI cost can be higher than you expect.

Worked example (illustrative)

A restaurant's UPI receipts in a month: ₹4,00,000 through UPI, of which ₹60,000 are wallet-funded payments above ₹2,000 in a category charged at 1.1%.

Line	Amount	Rate	Cost
Bank-account UPI up to ₹2,000	₹2,40,000	0%	₹0
Bank-account UPI above ₹2,000 (after UPI MDR)	₹1,00,000	0.4%	₹400
Wallet UPI above ₹2,000	₹60,000	1.1% (illustrative pass-through)	₹660
Total	₹4,00,000		₹1,060

Wallet payments are 15% of UPI value here but more than 60% of the UPI cost. GST at 18% would add ₹191.

RuPay credit cards on UPI

Since 2022 customers can link RuPay credit cards to UPI apps and pay at merchant QR codes. For merchants:

These payments are credit card payments for pricing purposes. The zero charge under section 10A covers RuPay debit cards and ordinary UPI up to ₹2,000, not credit cards.
The FAQ on UPI MDR (question 36) says credit-linked UPI payments, including RuPay credit cards linked to UPI and pre-sanctioned bank credit lines, "operate under separate credit product rules" and "follow standard credit card guidelines".
At launch, NPCI reportedly kept small-value payments at small merchants free of MDR. Whether such a concession still applies to your account is something to confirm with your acquirer in writing.
Not every QR accepts credit on UPI. Some small-merchant QRs may not; ask your bank.

Credit lines on UPI

The RBI allowed banks to offer pre-sanctioned credit lines through UPI in 2023. For a merchant, a credit-line payment looks like a UPI payment but is priced as a credit product. Ask your acquirer whether you accept them and at what rate.

How to find out what you are paying

Download the transaction-level settlement report from your acquirer or gateway.
Look for columns showing the payer instrument (bank account, PPI, credit card, credit line) and the fee per transaction.
Group by instrument and compute an effective rate for each.
If the report does not show the instrument, ask for it; you need it to compare offers.
Feed the result into the monthly cost estimator or the offer checklist.

Can you refuse wallet or credit payments?

Your merchant agreement decides which instruments you accept. Some acquirers let merchants choose; others enable everything by default. Refusing a payment method you have agreed to accept can breach the agreement. If credit-on-UPI costs you more than you want, discuss it with your acquirer rather than turning customers away at the counter. Do not add a surcharge without checking the rules; see the surcharge guide.

FAQ

Does the customer pay the 1.1%?

No. NPCI said at the time that PPI interchange is not charged to customers. It is a cost on the merchant side.

Is a wallet payment of ₹1,500 charged?

The PPI interchange applies to payments above ₹2,000. Below that, ask your acquirer whether any other charge applies.

Are RuPay credit card payments through a soundbox announced like UPI?

Usually yes; the soundbox announces the credit received. The pricing still follows card rules.

Will these charges change?

They can. NPCI and the RBI revise frameworks; check NPCI circulars and your agreement's notice clause.

Sources

NPCI — UPI circulars, including the PPI interchange framework effective 1 April 2023 and credit on UPI
Department of Financial Services — FAQ on MDR on select UPI (P2M) transactions, question 36 on credit-linked UPI
Reserve Bank of India — Master Direction on Prepaid Payment Instruments and credit lines on UPI