The National Payments Corporation of India (NPCI) is an umbrella organization for operating retail payment and settlement systems in India. It is a not-for-profit institution, incorporated in December 2008 under the provisions of Section 25 of the Companies Act, 1956 (now Section 8 of the Companies Act, 2013). NPCI was established as a joint initiative of the Reserve Bank of India (RBI) and the Indian Banks' Association (IBA) under the provisions of the Payment and Settlement Systems Act, 2007. Its creation solved the problem of fragmented payment systems by consolidating them to build a robust, efficient, and accessible national payment infrastructure.
NPCI functions as a central switch and clearinghouse, providing a neutral, interoperable layer that standardizes messages and enforces rules for digital transactions. It operates core national platforms like the Unified Payments Interface (UPI), Immediate Payment Service (IMPS), the indigenous RuPay card network, and the National Automated Clearing House (NACH). Interbank settlement for these systems occurs through central bank mechanisms or designated settlement banks. A related entity is NPCI International Payments Limited (NIPL), a wholly-owned subsidiary established in April 2020 to export Indian payment systems like UPI and RuPay to overseas markets.
A recent significant change involves the introduction of a Merchant Discount Rate (MDR) of 0.4% on specified Person-to-Merchant (P2M) UPI transactions exceeding ₹2,000, effective October 15, 2026. This change was enabled by the amendment of Section 10A of the Payment and Settlement Systems Act, 2007. However, Person-to-Person (P2P) transactions and P2M transactions up to ₹2,000 remain free for the consumer.