THIS Bank Starts Charging for UPI Transactions on Google Pay, PhonePe – What It Means for You

For years, UPI has been the cornerstone of India’s digital payments, offering seamless and free money transfers for users and merchants alike. However, a silent shift seems to be underway. ICICI Bank has reportedly begun imposing charges on Payment Aggregators (PAs) like Google Pay, PhonePe, and Paytm for processing UPI transactions . While there's no official public statement yet, multiple reports suggest that this could mark the beginning of a significant transformation in the way India transacts digitally.

RBI and Industry Experts Weigh In

The Reserve Bank of India has hinted before that the free UPI model may not be sustainable forever. At a recent event, Financial Services Secretary Sanjay Malhotra said, “Costs will have to be paid. Someone will have to bear the cost.”

Industry experts echo a cautious optimism. Krishna Kumar, a digital payments analyst, believes banks can still absorb these costs for now, but warns against introducing user-facing charges too soon. “Any sudden change could lead to public backlash or a return to cash transactions,” he cautions.

The Road Ahead

While this change won’t affect consumers immediately, it could pave the way for a gradual shift in the UPI model. If banks start charging PAs and those costs are eventually passed on, we might see the end of the "free UPI era."

For now, users can continue to enjoy free UPI services - but the writing on the wall suggests this may not last forever.