ICICI Financial institution to cost fee aggregators for UPI transactions from August 1: Sources

ICICI Financial institution will start charging fee aggregators for processing UPI transactions, marking the primary such transfer by a number one Indian lender because the banking trade pushes again in opposition to the associated fee burden of free digital funds.

Beginning August 1, 2025, the private-sector financial institution will implement a differentiated charge construction, folks near the developments confirmed with YourStory.

Fee aggregators (PAs) that maintain an escrow account with the financial institution can be charged 2 foundation factors (bps) per transaction, capped at Rs 6. These with out such a relationship will face a 4 bps charge, capped at Rs 10 per transaction.

The charges will apply solely when funds aren’t being settled right into a service provider account maintained with ICICI Financial institution, the folks mentioned, asking to not be recognized as the knowledge will not be public.

ICICI Financial institution’s resolution to start charging fee aggregators for UPI transactions stems from rising prices related to know-how infrastructure, transaction processing, and different operational components amid evolving financial circumstances.

The Head and Story was the primary to report that the private-sector lender will introduce a charge construction beginning August 1, 2025.

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RBI Guv Malhotra warns free UPI mannequin might not be sustainable

UPI transactions in India stay fully free for each retailers and customers, as the federal government has eradicated the Service provider Low cost Fee (MDR)—a processing charge sometimes paid by retailers that is charged as a proportion of transaction worth for card and digital funds. Banks and fee methods are barred from charging retailers straight or not directly, in accordance with the Revenue Tax Act, 1961.

An government at a big fee aggregator, talking on situation of anonymity, mentioned the corporate is planning to scale back its reliance on ICICI Financial institution however is anxious that different banks might quickly comply with with comparable costs.

ICICI Financial institution acts as a Payee Fee Service Supplier within the UPI ecosystem, serving to service provider or aggregator accounts obtain and settle funds. It’s the third-largest Payee PSP in India after Sure Financial institution and Axis Financial institution, having settled 1.7 billion UPI transactions in June 2025 alone.