ICICI Bank to levy fee on payment aggregators for UPI services

According to sources, more banks are looking to apply charges on PAs

- SUBRATA PANDA & AJINKYA KAWALE

ICICI Bank, the country's second-largest private sector lender, will from August 1 start charging a fee from payment aggregators (PAs) for handling Unified Payments Interface (UPI) transactions that these PAs facilitate on merchants' platforms.

The bank has sent letters to the PAs informing them of this decision.

According to a source familiar with the development, the bank will charge PAs that maintain an escrow account with the bank 2 basis points (bps) per transaction, capped at 6. For PAs that do not have an escrow account with the bank, the charge will be 4 bps, capped at 10 per transaction.

However, the bank will not levy any charges on PAs if the UPI transactions are settled directly into an ICICI Bank account held by the merchant, as the bank will have the opportunity to earn a float on these funds.