These days, from small vendors to big shopping malls, everyone accepts UPI payments. It’s quick, simple, and most importantly, free.
So much so that many people have stopped carrying cash. But the question is — will this free service remain free forever? Maybe not.
After Yes Bank and Axis Bank, ICICI Bank has also decided to charge a fee on certain UPI transactions starting August 1, 2025.
But does this mean you’ll have to pay every time you use UPI? Let’s understand it in simple terms.
Will You Be Charged for Regular UPI Payments?
Good news: No, regular users won’t be directly affected.
ICICI Bank’s new charges won’t apply to general customers. So, when you scan a QR code at a store or transfer money to a friend, you will not have to pay any extra fee.
The fee is actually being charged to payment aggregators — companies that handle payments for online platforms like Amazon, Swiggy, Zomato, etc.
Why Is ICICI Bank Charging Payment Aggregators?
Banks say that running UPI services is not free for them. Every transaction involves a cost, including a fee that banks must pay to NPCI (National Payments Corporation of India).
Until now, banks were covering this cost on their own. But now, ICICI Bank has decided to recover this expense by charging payment aggregators.
The RBI Governor had also mentioned earlier that UPI might not be free forever, and steps may be needed to keep it financially viable.
How Much Will ICICI Bank Charge?
The charges depend on whether the payment aggregator has an account with ICICI Bank or not:
If the aggregator has an escrow account with ICICI Bank:
They will be charged 0.02% per transaction, with a maximum cap of ₹6.
If the aggregator does NOT have an account with ICICI Bank:
They will be charged 0.04% per transaction, with a maximum cap of ₹10.
Also, merchants who have an active account with ICICI Bank will not have to pay anything.
Frequently Asked Questions (FAQs)
Q1: Will I be charged extra for scanning a QR code at a shop?
A: No, not at all. These charges are not for regular users. You can continue using UPI as usual without any extra cost.
Q2: Then who is being charged and why?
A: The charge is being applied to payment aggregators like Razorpay and PayU. These companies handle payments for online platforms. The bank is charging them to recover the cost of processing UPI transactions.
Q3: If I’m not paying, can it still affect me?
A: Yes, indirectly. If payment aggregators pass on the cost to merchants, they might increase the prices of goods or services slightly to recover it.
Q4: Is ICICI Bank the only one doing this?
A: No. Before ICICI Bank, Yes Bank and Axis Bank also announced similar charges. This shows a growing trend in the banking industry.
Q5: When will this rule start?
A: ICICI Bank’s new rule will be effective from August 1, 2025.
