Digital payments platform PhonePe has introduced a new policy that could affect users who have not used their PhonePe Wallet for an extended period. The company will now levy a ₹100 quarterly inactivity maintenance fee on dormant wallets, triggering widespread discussion among users across social media platforms.
The move has raised concerns among users who primarily use PhonePe for UPI transactions and may not even be aware that they have an active PhonePe Wallet linked to their account.
Who Will Be Charged The ₹100 Fee?
According to PhonePe’s updated wallet terms, a wallet will be classified as inactive if no financial transaction is carried out through the PhonePe Wallet for 365 consecutive days. Once a wallet becomes inactive, the company may charge a maintenance fee of ₹100 per quarter, including GST.
Importantly, activities such as logging into the app, making UPI payments, paying utility bills, recharging mobile numbers, or completing KYC formalities do not count as wallet activity for the purpose of preventing inactivity status. Only transactions conducted directly through the PhonePe Wallet qualify.
UPI Users Need Not Panic
PhonePe has clarified that the inactivity fee applies only to PhonePe Wallets and not to regular UPI transactions linked directly to bank accounts. Users who exclusively use UPI payments without maintaining a wallet balance will not be affected by the policy.
The fee will also be deducted only from the wallet balance itself. If the wallet balance is lower than ₹100, only the available balance will be deducted, and the balance will never become negative. Funds in linked bank accounts will not be touched.
PhonePe Will Send Advance Warnings
Before imposing the maintenance fee, PhonePe says it will notify users multiple times during a 15-day notice period. During this period, users can reactivate their wallets by completing a wallet transaction, thereby avoiding the fee entirely. Once the wallet becomes active again, no maintenance charge will be levied.
Why Is PhonePe Introducing The Fee?
The company states that the maintenance charge is intended to cover the operational costs associated with maintaining inactive wallets, including platform updates, security improvements, and system maintenance. Similar policies have been adopted by some financial institutions and prepaid payment providers to manage dormant accounts more efficiently.
Growing User Backlash
The announcement has sparked criticism on social media, with several users questioning the fairness of charging fees for services they rarely use. Some users have also suggested closing their wallets to avoid future charges, while others have urged greater transparency regarding wallet management and account closure processes.
As digital wallet usage continues to evolve, the new policy serves as a reminder for users to review their payment accounts regularly and understand the terms associated with wallet services.
Summary:
PhonePe will charge a ₹100 quarterly inactivity maintenance fee on wallets that remain unused for 365 days. The fee applies only to PhonePe Wallets, not UPI transactions linked to bank accounts. Users will receive advance notices and can avoid the charge by making a wallet transaction. The policy has sparked debate among users concerned about dormant account fees.
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