ICICI Bank is now going to charge transaction fees from payment aggregators (PAS) on UPI payments. This new rule can be applicable from 1 August 2025. Prior to this, Yes Bank and Axis Bank have also done this.
How much will be charged?
If someone holds an escrow account in PA ICICI Bank, then every transaction will have a charge of 2 basis points (0.02%). Its maximum limit will be Rs 6 per transaction. PAS, which does not have a escrow account in ICICI, will be charged 4 basis points (0.04%). In this situation, the maximum charge has been fixed at Rs 10 per transaction.
Who will not be charged?
If the transaction is settled directly in the ICICI Bank account of the merchant, then there will be no charge.
The rest of the banks are already charging charge
Other banks like YES Bank and Axis Bank have been charging on UPI transactions from PAS for the past 8–10 months.
Why is this charge being charged?
Although the government has kept the Merchant Discount Rate (MDR) zero on UPI, NPCI i.e. National Payments Corporation of India charge a switch fee from banks. Some banks are charging this cost from payment aggregators.
What will be the effect of merchant?
Payment aggters typically charge in advance for service from merchant for service fees, payment reconsyliation fees. In such a situation, the impact of the new charge of ICICI can further reach the merchants. The UPI may be free for customers, but the banks are now moving towards their expenses by charging fees from payment aggregators.