PhonePe Experiments With Charging a Processing Fee on Prepaid Mobile Recharges Above Rs. 50

PhonePe users have taken to social media to express disappointment over processing fee on mobile recharges above Rs. 50. The company has confirmed that recharges below Rs. 50 are not charged, recharges between Rs. 50-100 are charged Rs. 1, and above Rs.100 are charged Rs. 2. PhonePe maintains that this is a ‘very small-scale experiment' and isn't affecting all users. Affected users have been criticising this move, as other portals continue to not charge ab additional processing fee on mobile recharges.

In an official statement, PhonePe says, “We are running a very small-scale experiment where some users are paying a small processing fee for mobile Recharges. Recharges below Rs. 50 are not charged, recharges between Rs. 50-100 are charged Re. 1 and above Rs. 100 are charged Rs. 2. Given the tiered nature of the processing fee, a large section of users are either paying nothing or paying Re. 1.” Phone clarifies that the processing fee is being charged on mobile prepaid recharges only and is across payment instruments – including credit cards, debit cards, and UPI.

As mentioned, PhonePe continues to not charge any fee on recharges below Rs. 50. While PhonePe has introduced this as an experiment, other platforms like Freecharge or Paytm levy no processing fee on mobile recharges. PhonePe says that this is an experiment and not a commercial rollout. It may roll it back depending on feedback. Currently, the additional processing fee is showing up for several users, including several accounts that we verified personally.

Most of the digital payments apps charge a transaction fee on payments done through credit cards, including PhonePe. However, it becomes the first to charge a fee across instruments on mobile recharge. The company has clarified that other payments that are done using UPI will continue to remain free and no charge will be levied.

Data released by the National Payments Corporation of India (NPCI) in July this year showed PhonePe dominating the UPI app ecosystem in India with a market share of 46.04 percent. PhonePe carried 1,292.71 million transactions worth Rs. 2,62,565.88 crores in June that were 142.87 million more from the 1,149.84 million it made in May. In September, this has increased to 1,653.19 million transactions worth Rs. 3,06,437.37 crores.