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ICICI Bank is now going to charge transaction fees from payment aggregators on UPI payments. This new rule can come into effect from August 1, 2025. Earlier, Yes Bank and Axis Bank have also done this.
How much will it cost?
If a PA maintains an escrow account with ICICI Bank, a charge of 2 basis points (0.02%) will be levied on each transaction. Its maximum limit will be Rs 6 per transaction. PAs who do not have an escrow account with ICICI will be charged 4 basis points (0.04%). In this case, the maximum charge has been fixed at Rs 10 per transaction.
Who will not be charged?
If the transaction is settled directly into the merchant’s ICICI Bank account, no charges will be levied.
Other banks are already collecting charges
Other banks like Yes Bank and Axis Bank have been charging PAs for UPI transactions for the past 8–10 months.
Why is this charge being levied?
Although the government has kept the Merchant Discount Rate (MDR) on UPI at zero, NPCI i.e. National Payments Corporation of India charges a switch fee from banks. Some banks are recovering this cost from payment aggregators.
What will be the impact on the merchant?
Payment aggregators usually charge merchants upfront for services such as platform fees, payment reconciliation fees. In such a situation, the impact of ICICI’s new charge may reach merchants in the future. Even though UPI is free for customers, banks are now moving towards recovering their expenses by charging fees from payment aggregators.
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