ICICI Bank Starts Charging UPI Aggregators Amid Record Usage Surge

ICICI Bank has rolled out transaction fees on UPI payments processed by aggregators like PhonePe and Google Pay.

This development comes as UPI recorded a historic milestone—over 700 million daily transactions in early August 2025, according to NPCI data.

Effective August 1, ICICI Bank will charge 2 basis points per UPI transaction for aggregators holding escrow accounts with the bank, capped at Rs 6. Aggregators without such accounts will face a higher fee of 4 basis points, capped at Rs 10. However, merchants directly settling payments into ICICI accounts are exempt.

The move signals a possible shift in the zero-fee model of UPI, driven by growing infrastructure costs and reduced subsidies. With payment aggregators now forced to either absorb the fee or pass it on to merchants, concerns loom over cost implications for small businesses.

Despite this monetisation trend, UPI continues its upward trajectory with a 35% YoY transaction volume increase, and the government is aiming for a billion daily transactions by 2026. As discussions around reintroducing the Merchant Discount Rate gain traction—even from the RBI—ICICI’s policy could reshape the digital payments ecosystem.