Recharging your phone on PhonePe? You need to pay service charges! Here's how much and why!

PhonePe has emerged as one of the largest e-paying platforms in India and it has now decided to introduce a new system, unlike its peers, that had probably disturbed its users. If you are using PhonePe and are habitual of recharging your phone using the platform, you need to pay service charges based on the amount that you have recharged. PhonePe has become the first such app to levy service charges on the users for mobile recharge. 

The unprecedented experiment from PhonePe had drawn flak from its users as they had expressed disappointment over the new system of service charges. According to reports, PhonePe will be levying service charges for every recharge above Rs 50. While affirming that it won't charge anything for mobile recharges below Rs 50, the company has said that the processing fees in the range of Re 1 or Rs 2 will be charged per transaction of recharge above Rs 50. It has been reported that for recharges above Rs 50, it will be charging Re 1 and for above Rs 100, you will be charged Rs 2. 

PhonePe has said that the system is a very small-scale experiment and it won't affect all the users. In an official statement, PhonePe has said, "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." 

PhonePe has clarified that the processing fee is being charged on mobile prepaid recharges only and is across payment instruments including UPI, debit and credit cards. It is pertinent to note that other transactions on PhonePe and money transfers continue to remain free of charge. According to reports, PhonePe has said that the measure of levying processing fees is a standard industry practice.

Speaking about bill payments, the PhonePe spokesperson had maintained that PhonePe is 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. We charge a processing fee on payments with credit cards only", the spokesperson added.

However, while most digital payment applications, including PhonePe, charge a transaction fee on payments done through credit cards, PhonePe has become the first platform to charge a processing fee for mobile recharge. As per the data released by the National Payments Corporation of India in July this year, PhonePe is the dominant player among the UPI platforms in India with a market share of 46.04 per cent. In June, PhonePe had carried out 1,291.71 million transactions worth Rs 2,62,565.88 crores and it has increased to 1,653.19 million transactions worth Rs 3,06,437.37 crores in September.