The performance of devices made from III-V compound semiconductors relies heavily on their surface and interface properties. The InAsP/InP material system is recently gaining interest due to its suitability for the next generation of long-haul classical and quantum communication applications. Researchers are studying how surface and interface properties affect the efficiency of the device and concludes that the epitaxial growth conditions responsible for creating surface and interface states require further improvement. To address this, we have studied the effect of the top (cap) layer and post-growth on-site hydride passivation on the properties of InAsP/InP hetero-structures grown using metal-organic vapor phase epitaxy technique. The flow rate and flux ratios of the hydrides significantly affect the surface reaction rates and gas-phase diffusion coefficients, which in turn impact the As↔P exchange mechanisms. Our findings suggest that post-growth on-site arsine passivation encourages the As↔P substitutions at the vicinity of the desorption sites of phosphorus, leading to the arsenic-rich surface of InAsP with the diffused hetero-interfaces. The activation energy for such As↔P exchange reaction mechanism is evaluated as ∼ (1.4 ± 0.3) eV. On the other hand, it has been observed that the thin cap layer of InP protects the surface of the InAsP epilayer and thereby preserving the sharp interface. Further, surface photovoltage and photoluminescence spectroscopy is employed to examine the role of the diffused and sharp interface of InAsP/InP hetero-structures in charge carrier transport, their redistribution and recombination process. Our analysis of the energy transitions occurring in the surface photovoltage and photoluminescence spectrum reveal that the energy band alignment and the subsequent charge carrier redistribution processes is influenced by the surface and interface states. These changes in the surface photovoltage phase spectra of InAsP/InP system also support the role of surface and interface states in the generation and separation of the charge carriers. The study provides insights into the effects of As↔P exchange on surface and interfacial quality, highlighting the implications for optoelectronic device development using InAsP/InP material system.