PhonePe, a digital payments service owned by the Walmart Group, has begun imposing processing fees ranging from Rs 1 to Rs 2 per transaction for Mobile recharges worth more than Rs 50, even when done through UPI.
The startup is the first digital payments app to begin charging for UPI-based transactions, which its competitors give for free.
PhonePe, like the other players, charges processing fees for credit card payments.
“On recharges, we are doing a small-scale trial in which a few consumers pay for Mobile recharges. Recharges of less than Rs 50 is not charged, recharges of between Rs 50 and Rs 100 are charged Rs 1, and recharges of more than Rs 100 are charged Rs 2. Essentially, as part of the experiment, the majority of consumers either pay nothing or pay Re 1 “According to a PhonePe spokeswoman.
Among third-party apps, PhonePe has the highest share of UPI transactions. In September, the company reported over 165 crore UPI transactions on its platform, accounting for more than 40% of the app market.
To be clear about bill payments, “We are not the only company or payment platform that charges a fee. Charging a small fee for bill payments is now common industry practice, and other biller websites and payment systems do it as well. On credit card payments exclusively, we charge a processing fee (often known as a convenience fee on other platforms). “ Furthermore, the spokeswoman stated.
According to a July edition of Bernstein report, PhonePe and Google Pay continue to invest in providing customer incentives and spend on marketing at 2.5-3.0 times revenue, while Paytm has reduced marketing spend from 1.2 times revenue in fiscal year (F.Y.) 2017 to 0.4 times in FY20, and now to 0.2 times revenue (FY21), while increasing merchant payments share across wallets, UPI, PoS, and online payments.