Upi transaction charges: Private sector lender Icici Bank from August 1 from Payment Agriculture (PAS) Upi It has been decided to charge a fee on transactions. According to the Business Standard report, the bank has sent a letter to the aggregators in this regard and informed them.

What are payment aggregators?

Payments aggregators are mediator that makes the payment process easier between banks and merchants. They first collect the amount from customers and then send it to the merchant. This category includes big names like Google Pay, PhonePe, Mobikwik and Razorpay.

How much will the fee be charged?

According to sources, ICICI Bank has decided that

• Jin PAS Escrow Account Icici In the bank, 2 basis points (BPS) per transaction will be taken from them, which will be limited to maximum ₹ 6.
• The PAS’s escrow account will not be in ICICI Bank, 4 BPS per transaction will be taken from which the limit will be ₹ 10.
• However, if the UPI payment of a businessman is directly settled in the ICICI Bank account, no fee will be charged in such cases.

Indication from RBI Governor’s comment

A payment company official said, “If you look at the recent statement of RBI Governor, there was talk of charging on UPI. Banks have probably taken this step with the same indication. Banks need revenue in view of the technical structure and the costs to the UPI switch.”

Other banks are also charging fees

According to the report, YES Bank and Axis Bank also charge payments from payment aggregators. Yes Bank, Axis Bank and ICICI Bank are the three biggest players in UPI Ecosystem, which are active on both Pair and Payy sides.

Increased UPI transaction pressure

Experts believe that UPI transactions are increasing rapidly in the Peer-to-Merchant (P2M) segment. To deal with this, banks have to invest in infrastructure on a large scale. Since the UPI does not have Merchant Discount Rate (MDR), this arrangement is almost without revenue for banks.

Who will pay the price?

Banks also pay fees for UPI switch use. On the other hand, pas charge platform fees and convenience fee from traders. But there is no extra load on customers. In such a situation, experts say that now banks are charging PAS to increase revenue. Another payment company official said, “PAS will either put additional burden on traders or bear themselves. Credit card transactions have also increased on UPI, which has already made monetization possible at some level.”

Role of escrow account

When the customer pays a businessman from UPI, the PA plays the role of a mediator between the customer’s bank and the businessman’s bank. Often PAS has a escrow account in a bank. The amount of transaction first comes to this account and later settles in the businessman’s bank account.

Note

This step of ICICI Bank can bring a big change in UPI ecosystem. While it will become a new means of revenue for banks, additional cost burden on payment aggregators and traders may increase. In the coming time, it will be important to see if these companies raise the pressure of the fee or bring it to the traders.