PhonePe to charge ₹100 quarterly fee on wallets inactive for a year: Here's how users can avoid it

Digital payment and financial services company, PhonePe, has revised its wallet policy to introduce an inactivity maintenance fee for users who do not use their wallets for an extended period.

According to the updated guidelines on its website, if an user has not made any financial transactions through the PhonePe Wallet in the past one year or 365 consecutive days, their wallet will be classified as inactive and attract a ₹100 (including GST) quarterly maintenance fee.

“This fee will be charged to support continuous platform updates, fixes, and improvements to make the user experience better,” the company noted.

The company also clarified that simply logging into the application, performing UPI transactions, on-app category payments or any other non-wallet transactions do not constitute wallet activity.

How will PhonePe deduct the fee?

Once a wallet becomes inactive, the users will receive a 15-day notice before the inactivity fee is deducted. In that grace period, the company will notify the user multiple times and will also provide guidance on re-activating the wallet, PhonePe said in the revised guidelines section.

If a financial transaction using the wallet is completed by the user during this period, the wallet status will be changed to ‘Active’ and no fee will be levied to the user. In case no action is taken, then the fee will be deducted from the wallet balance of the user at the end of the 15 days notice period.

The wallet maintenance fees will be deducted from the existing wallet balance itself. If wallet balance is less than the prescribed charges, then the entire wallet balance will be debited and wallet balance will become zero. The company also clarified that wallet balance will never be negative.

How can users avoid this fee?

Several users on social media have claimed they received messages from PhonePe warning them about wallet inactivity and urging them to take action. Hence, users must check their PhonePe Wallet activity to determine whether their account may be affected by the new policy.

The inactivity fee applies only to wallets that have not recorded any financial transaction for 365 consecutive days. To avoid the charge, users need to complete at least one transaction through their PhonePe Wallet within that period.

This is not the first time a digital payment platform has introduced inactivity charges as similar measures have been adopted by other fintech firms in the past to manage dormant wallet accounts. in 2021, Mobikwik introduced a wallet maintenance charge for inactive users, with charges ranging from ₹100 to ₹140 depending on the wallet balance and inactivity period.

Meanwhile, Airtel Payments Bank had also charged maintenance fees for wallets that remained inactive for a certain period. However, later it was moved to an annual maintenance charge structure.