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New Delhi- Till now, most of the big banks in the country have not imposed any charges on UPI. But now a large private sector bank ICICI has taken a step in this direction. From August 1, 2025, the country’s large private sector bank ICICI has taken a big decision that can affect crores of people using digital payments.
Now the bank will charge fees for UPI transactions from payment aggregators like Google Pay, PhonePe, Mobikwik, Razorpay. Although the general customers will not have to pay the charges directly, but it will affect the shopkeepers and may eventually reach the customers.
What is the whole matter?
Payment aggregators (PAs) like Google Pay or PhonePe act as a bridge between merchants and banks. When a customer makes a payment using UPI on a website or app, these aggregators process that transaction. Now ICICI Bank has decided to charge them a fee on every transaction.
How much will be charged?
If the Payment Aggregator (PA) has an escrow account with ICICI, then 2 basis points (bps) or a maximum of ₹6 per transaction will be charged. If the Payment Aggregator does not have an escrow account with ICICI, then 4 basis points (bps) or a maximum of ₹10 per transaction will be charged. If the merchant has an account with ICICI and UPI is settled in the same, then no charge will be levied. Because the bank gets interest on it.
Why did the bank take this step?
The Reserve Bank of India (RBI) Governor has recently given some hints about charging on UPI. The cost of banks in maintaining the UPI system is increasing. Therefore, heavy investments are being made in infrastructure, security and technology. While there is no merchant discount rate (MDR) on UPI, that is, banks do not earn income from it. In such a situation, banks are now trying to generate revenue from payment groups.
Will there be a direct impact on customers?
Currently, there will be no charge on general customers but experts believe that aggregators can pass on this cost to merchants, which can later be passed on to customers in the form of an increase in the price of goods or services. Apart from ICICI, other private banks like Yes Bank and Axis Bank are also charging fees for UPI transactions from payment aggregators. In fact, ICICI, Axis and Yes Bank – all three play an important role in the UPI ecosystem. An official associated with the payments industry said that ‘UPI’s P2M i.e. customer-to-merchant transactions have grown rapidly. But banks are not earning from it, so it is natural to turn to the charging model.
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