PhonePe Transaction Fees: Mobile Prepaid Recharges Above Rs 50 To Cost More — Here's Why

PhonePe has started charging processing fees in the range of Rs 1 to Rs 2 per transaction for mobile charges done for above Rs50.

PhonePe Logo | File Image

New Delhi: If you are using the digital payments app PhonePe for charging your mobile, then you have to spend a little extra every time you recharge above Rs 50. Walmart's Group online payment application PhonePe has become the first such app to start charging for mobile recharges.

What are the charges?

It has started charging processing fees in the range of Rs1 to Rs2 per transaction for mobile charges done for above Rs50. The company said it is not charging anything for mobile recharges below Rs50.

For recharges between Rs 50 and Rs 100, it is charging Rs 1 and above Rs 100 mobile charges, the PhonePe customers will be charged Rs 2.

"On recharges, we are running a very small-scale experiment where a few users are paying for mobile recharges. Recharges below Rs50 are not charged, recharges between Rs50 and Rs100 are charged Re 1, and above Rs100 are charged Rs2. Essentially, as a part of the experiment, a majority of users are either not paying anything or paying Re 1," PhonePe said.

Like other players, PhonePe is also charging processing fees for payments made through credit cards. However, it is to be noted that other transactions on PhonePe and money transfers will continue to remain free of charge.

Why is the company charging this fee?

The company believes the measure taken is a standard industry practice. While clarifying bill payments, the spokesperson said, "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."

PhonePe holds the largest share in terms of UPI transactions among the third-party apps. It has recorded over 165-crore UPI transactions on its platform in September, clocking over 40 percent share among the app segment. Launched in 2015 by former Flipkart executives, Sameer Nigam, Rahul Chari, and Burzin Engineer, the digital payment app has over 300 million registered users.

(With inputs from PTI)