UPI transactions new rule from April 1: Users will not be charged due to PPI interchange, clarifies NPCI

With this addition to UPI, customers will have the choice of using any bank account, RuPay Credit card, and prepaid wallet on UPI-enabled apps.

"The NPCI circular will make wallets more appealing to customers by opening up newer use cases of payments. It will eliminate the need for customers to carry multiple cards, thereby reducing fraud and theft due to the exposure of card numbers," said Akash Sinha, Co-founder & CEO at Cashfree Payments.

Many merchants use wallets for accepting customer payments, for instance, at PoS. Interoperability will significantly ease collection for them since it will allow merchants to accept wallet payments regardless of the wallet being used by the customer.

"Further, it will eliminate the need for specific integrations with a particular wallet to accept payments on a website since customers can also pay via UPI or card infrastructure. This will increase the payment alternatives for customers. The interoperability of wallets with UPI will catalyse the progress of digital payments, enhancing the customer experience," Sinha told CNBC-TV18.com.

Echoing similar views, Ashwin Chawwla, CEO & Founder at Escrowpay, said that this decision is expected to bring in much-needed revenue for payment service providers, who have been struggling to maintain profitability due to the low transaction fees on UPI transactions.

"The increased charges on high-value UPI transactions are also expected to encourage merchants to adopt other payment modes, such as credit and debit cards, which have higher transaction fees. This will diversify the payments ecosystem and reduce the dependence on UPI for all transactions. With the introduction of a charge on high-value transactions, merchants are likely to adopt UPI for all transactions, which will further increase the adoption of digital payments," Chawwla told CNBC-TV18.com.