ICICI Bank is reportedly going to charge payment aggregators for processing UPI Payments from August 1. This move falls in line with recent reportage on UPI payments not remaining free in the future. The fee is reportedly being levied because the bank has been bearing the cost payable to National Payments Corporation of India for using its infrastructure for routing UPI transactions.
Are end users affected?
Just to make things clear, ICICI Bank will be charging payment aggregators and not the end customers. This means companies like RazorPay, PayU, and Cashfree will be affected. AS mentioned, the bank has taken this measure to cover the cost payable to NCPI.
How much will the payment aggregators have to pay?
ICICI Bank, according to CNBC, will charge 2 basis points (0.02 percent) per transaction to users who have an escrow account with the bank. This will be capped at Rs. 6 for aggregators that maintain an account with ICICI Bank.
For those who do not have an account with ICICI Bank, these aggregators will be charged at 4 basis points (0.04 percent) per transaction. The maximum charge will be capped at Rs. 10 for these users.
ICICI Bank further notes that merchants with an active bank account will not bear any cost, thereby maintaining that these charges are being levied only on those with that use ICICI Bank for only its digital payments services.
This comes just a week after RBI Governor Sanjay Malhotra signalled that the era of completely free digital transactions via the Unified Payments Interface (UPI) may not last forever. He said that the UPI interface should be made financially sustainable in the future.
