News Update

PhonePe becomes first digital payments app to have started charging for UPI-based transaction

• ByStartupStory     |    October 23, 2021

There is bad news for PhonePe users. Actually, now it has become expensive to do mobile recharge through the digital payment app PhonePe.

PhonePe, Walmart group’s digital payments firm, has started charging a processing fee (platform fee/convenience fee) from some users for mobile recharge of Rs 1 to 2. The special thing is that this extra charge is applicable on recharge through any payment mode (UPI, Debit Card, Credit Card and PhonePe Wallet).

The company is the first digital payments app to have started charging for UPI-based transactions which is being offered for free by its competitors. Like other players, PhonePe is also charging processing fees for payments made through credit cards.

“On recharges, we are running a very small-scale experiment where a few users are paying for mobile recharges. Recharges below Rs 50 are not charged, recharges between Rs 50 and Rs 100 are charged Re 1 and above Rs 100 are charged Rs 2. Essentially, as a part of the experiment, a majority of users are either not paying anything or paying Re 1,” a PhonePe spokesperson said.

There are lakhs of people in the country who use PhonePe and do transactions of thousands of rupees every day, in such a situation people will have to pay processing fee for phone recharge transaction and it is not optional. Therefore, the burden on the pocket is going to increase now.

If you do a transaction worth less than Rs 50 using PhonePe, then you will not have to pay any extra charge for this, whether you do the transaction once or thousand times, you will not have to pay any extra amount. . In such a situation, if you do small recharges with the help of this app, then there is no need to worry because then your transaction will not come under processing fee.

PhonePe has the largest share in terms of UPI transactions among the third-party apps. The company had recorded over 165-crore UPI transactions on its platform in September, clocking over 40 per cent share among the app segment.

To clarify on bill payments, “we are not the only player or payment platform charging a fee. Charging a small fee on bill payments is now a standard industry practice and is done by other biller websites and payment platforms also. We charge a processing fee (called as convenience fee on other platforms) on payments with credit cards only,” the spokesperson added.

At present, there are many apps for online transactions in the market, in which Google Pay, Paytm and Phone Pay are the most popular and people like to use them. Although no extra charge has to be paid for doing transactions on Google and Paytm, if you do a transaction on PhonePe, then it will be necessary to pay the charge here. Although the processing fee is modest, it can still have an impact on people.

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