ICICI Bank: From August 1, ICICI Bank will charge fees on every transaction from apps like Google Pay, PhonePe that process UPI payments. This can bring a new turn in the world of digital payments.
ICICI Bank: Till now, most of the big banks in the country have not imposed any charge on UPI. But now a big private sector bank ICICI has taken a step in this direction. From August 1, 2025, the country’s big private sector bank ICICI has taken a big decision which 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 common customers will not have to pay the charge directly, but it will affect the shopkeepers and can eventually reach the customers.
What is the whole matter?
Payment aggregators (PA) like Google Pay or PhonePe act as a bridge between merchants and banks. When a customer makes a payment through 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 the charge
If the payment aggregator’s (PA) escrow account is in ICICI, then 2 basis points (bps) or a maximum of ₹6 will be charged per transaction. If the payment aggregator’s escrow is not in ICICI, then 4 basis points (bps) or a maximum of ₹10 will be charged per transaction. If the merchant has an account in ICICI and UPI is settled in the same, then no charge will be charged. Because the bank gets interest on that.
Why did the bank take this step?
The Governor of the Reserve Bank of India (RBI) recently gave some indications about charging on UPI. The cost of banks is increasing in maintaining the UPI system. For this, huge investments are being made in infrastructure, security and technology. Whereas 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 aggregators.
Will there be a direct impact on customers?
For now, no charges will be levied on common customers but experts believe that aggregators can pass on this cost to merchants, which can later reach 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. Actually, ICICI, Axis and Yes Bank—all three play an important role in the UPI ecosystem. An official associated with the payment industry said that ‘UPI’s P2M i.e. customer to merchant transactions have increased rapidly. But banks are not earning from this, so it is natural to turn to the charging model.
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