Daijiworld Media Network – New Delhi
New Delhi, Aug 5: India's flagship digital payments system, the Unified Payments Interface (UPI), has crossed a new landmark by processing over 700 million transactions in a single day for the first time on August 2, according to data from the National Payments Corporation of India (NPCI).
In July 2025 alone, UPI recorded 19.47 billion transactions worth Rs 25.1 lac cr, reflecting a 35% year-on-year surge in volume and a 22% rise in transaction value. The daily average has climbed from 628 million in June to beyond 700 million in August, placing the government’s ambitious 2026 goal of 1 billion daily UPI transactions well within reach.
However, the milestone came amidst a significant shift in the UPI ecosystem. ICICI Bank, one of the country’s largest private sector banks, has started charging payment aggregators like PhonePe and Google Pay a transaction fee from August 1. Payment aggregators with ICICI escrow accounts will pay 2 basis points per transaction (capped at Rs 6), while those without such accounts will be charged 4 bps (capped at Rs 10). Notably, merchants receiving direct settlements into their ICICI accounts are exempt from the new charges.
Until now, only Yes Bank and Axis Bank had imposed similar fees. ICICI's decision reflects growing pressure on banks to recover infrastructure costs, especially as government subsidies shrink and the absence of a Merchant Discount Rate (MDR) continues.
The move is likely to impact the business models of fintech platforms and small merchants. Aggregators may either absorb these fees or pass them on to merchants, potentially raising the cost of UPI acceptance—particularly burdensome for small businesses operating on thin margins.
Despite the monetisation debate, UPI continues to post strong growth, driven by wider merchant adoption and deepening digital penetration. Merchant payments now contribute over 60% of UPI volumes.
As UPI consolidates its position as the world's largest real-time retail payment system, stakeholders are calling for a re-evaluation of the zero-fee model to ensure long-term sustainability. With support building even within the Reserve Bank of India for MDR revival, ICICI Bank’s move may signal the beginning of a broader shift in the digital payments landscape.