PhonePe is the first digital payment app to start charging for UPI-based transactions. However, this service is being provided free of cost by its other companies. The digital payment app has started imposing processing fees ranging from Re. 1 to Rs. 2 per transaction for mobile charges above Rs. 50. PhonePe users will be charge Re. 1 for recharges between Rs. 50 and Rs. 100, and Rs. 2 for recharges higher than Rs. 100.
PhonePe has confirm, “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 charge Re 1, and above Rs. 100 are charge Rs. 2. Basically, as a part of the experiment, a majority of users are either not paying anything or paying Re 1.”
PhonePe will start charging processing fees for payments made using credit cards in the same way that other payment applications have done so far. Along with Paytm and Google Pay, it is one of the most popular and widely-used payment apps in India, accounting for a significant portion of total payments.
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“We are not the only player or payment platform that charges a fee,” says the author. In addition to biller websites and payment platforms, additional biller websites and payment platforms are now charging a modest fee to process bill payments. A processing fee (also known as a convenience fee on other platforms) is charge solely on purchases made using credit cards.
Furthermore, the National Payments Corporation of India (NPCI) recently placed a cap on the market share for UPI. According to the rule, there can be no player which has a market share of above 30 percent. According to the Bernstein report, both PhonePe and Google Pay will have to bring down their customer incentives, to bring share towards the 30 percent cap.
In related news, PhonePe which had earlier approached the Bombay High Court seeking an injunction to restrain Resilient Innovations. Which operates BharatPe, from misusing the company’s registered trademarks. PhonePe has withdrawn its petition against BharatPe’s Buy Now Pay Later (BNPL) Postpe platform which it had allegedly violated PhonePe’s trademark and said it will file a fresh suit in this regard.