PhonePe users may soon face a quarterly maintenance charge for wallets that remain unused for an extended period. The company’s recent update to its wallet guidelines indicates that a fee of Rs 100 will be imposed if a user’s PhonePe wallet is inactive for a full year. This inactivity is defined as the absence of any financial transactions from the wallet for 365 days.

The announcement has sparked criticism among users, particularly on social media platforms. Some users have expressed concerns regarding the newly implemented terms, highlighting that many individuals use other methods to make transactions and do not rely on the PhonePe wallet itself. This commentary reflects a view that customers are being charged for a feature that they rarely utilise.

To avoid incurring the Rs 100 fee, users must complete at least one wallet transaction within the year. Merely accessing the PhonePe app or making payments through UPI without involving the wallet will not be sufficient to reactivate the account.

Notification and Deduction Process

Prior to implementing the fee, PhonePe will provide users with a 15-day notice period. Should the wallet have a sufficient balance, the company will deduct the Rs 100 directly from the account. In cases where the balance is below Rs 100, PhonePe will deduct the available amount, leaving the wallet with a zero balance instead of a negative one.

This approach aims to ensure that users are aware of any potential charges and have an opportunity to complete transactions to avoid the inactivity fee. It represents a shift in how digital wallets operate, reflecting a trend towards maintaining active customer engagement.

PhonePe’s decision aligns it with industry practices, as several digital payment platforms have also adopted inactivity fees in recent years. These fees serve as a mechanism to encourage wallet usage and maintain ongoing interaction with the service.

Industry Trends in Inactivity Fees

The concept of inactivity fees is not new within the digital payments sector. Other fintech companies have implemented similar charges for wallets that have not been used over extended periods. For instance, MobiKwik introduced a comparable fee structure in 2021 designed to penalise long-term inactivity.

Moreover, Airtel Payments Bank had previously adopted a wallet maintenance fee policy for inactive accounts. Under its earlier guidelines, users could be charged Rs 20 if their wallet remained dormant for three months. This approach reflected an effort to manage inactive accounts effectively.

Airtel later revised its policy to introduce an Annual Maintenance Charge (AMC) system, which implemented a charge of Rs 75 per year for active wallets. This fee is collected in quarterly instalments and aims to facilitate the continued availability of wallet services while also encouraging regular usage of the platform.

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