How PhonePe is Charging Processing Fee on its Transactions
PhonePe is one of the most used E-wallet and UPI apps currently being used in the country. Using UPI all across the country has promoted cashless transactions and payments on multiple levels. Usually, the processing fee is related to the Phonepe transaction limit per day because it depends on your transaction history. But some time ago, PhonePe started charging transaction fees even though the Unified Payments Interface. Let us see why it is making waves.
On Mobile Recharges
Recently PhonePe made a buzz because it started charging transaction fees for the seamless payment of mobile recharges. While other platforms are offering their services for free, Walmart Group’s payment platform started charging 1-2 INR on every recharge done through the platform which amounts to more than 50 INR. Even if customers are using UPI (or the Unified Payments Interface) to make the payment, they will face additional charges.
The company said that they are conducting an ‘experiment’ concerning the transaction fees. While the Phonepe transaction limit per day is 20 transactions, you will have to pay a convenience fee on every recharge you do which costs more than INR 50.
Where does the Transaction Fee Apply?
If you are concerned with the Phonepe transaction limit per day, you will first have to understand where the transaction limits apply. Currently, all we have observed is the processing fees on phone recharges. But where does this apply?
-
UPI transactions
UPI transactions currently have a processing fee on PhonePe even though competitors like GPay and PayTM are still providing it for free. Apart from knowing about processing fees, it will help to understand that there is a Phonepe transaction limit per day. However, all transactions within this limit will still be liable for processing fees as long as you are using a credit card or recharging your mobile.
-
Credit and debit cards
However, this practice is more commonplace all across the world as there are some extra charges you have to pay during payments.
While knowing the current processing fee is important, you should also stick to the Phonepe transaction limit per day which is INR 1 lakh. Exceeding the daily limit can cause your payment to fail. You can click here to know more about charges on transactions done on PhonePe and the PhonePe transaction limit per day.
Why is PhonePe Charging a Processing Fee?
As of now, only PhonePe is charging processing fees on UPI payments. PhonePe, on the other hand, insists that this is standard practice happening across the industry.
The company clarified that the practice of charging a convenience fee or a processing fee is not new. They are confident that this minimal amount is a standard industry practice and it does happen on credit card payments so you will see across different merchants. Charging extra fees related to the Phonepe transaction limit per day is also common.
Where Does PhonePe Stand?
There is a reason why PhonePe’s stand to start charging processing fees for something as basic as mobile recharges is breaking news. PhonePe is currently a market leader among payment platforms in India. GPay remains a strong competitor because both platforms have strongly invested in incentivizing the payments made by all customers.
As per this cap, no service provider can hold more than a 30 percent share in the market. Both PhonePe and GPay will thus have to hold back on their incentives related to the payment to make way for more merchants.
Currently, even if there is a Phonepe transaction limit per day, people are driven to use it because of incentives like rewards and cashback after payment. If the incentives are reduced, the platform will have no choice but to charge a small processing fee in the coming time for generating revenue. Because this applies to all giants that have a large UPI market share, the precedent of convenience fees can become a reality.
The Takeaway
Understanding this practice is important even if it is on an experimental basis for now. But given the market conditions, it would not be far-fetched to expect this experiment to become commonplace.
Apart from knowing about processing fees, it will help to understand that there is a Phonepe transaction limit per day. However, all transactions within this limit will still be liable for processing fees as long as you are using a credit card or recharging your mobile.