ICICI Bank UPI Fees on Payment Aggregators From 1 August 2025
Why in the news
ICICI Bank became the newest large private lender to recover UPI costs from payment aggregators, effective 1 August 2025.
Key facts
- Banks spend on switches, APIs and fraud monitoring, and also pay NPCI for the UPI switch.
- With zero MDR on UPI, per-transaction income is minimal.
- A PA may pass the fee on to merchants or absorb it, as per its contract.
- P2M volumes and credit card-linked UPI are growing, adding monetisation pressure.
How a PA works
- It links the customer’s debit-side bank with the merchant’s credit-side bank.
- It holds an escrow account with its banking partner, then settles with the merchant.
Exam angle
- Banks already charging PAs: Yes Bank and Axis Bank.
- Account type a PA keeps: escrow.