Digital payments platform PhonePe has started informing customers about a new Wallet Inactivity Maintenance Fee, under which users with dormant wallet accounts will be charged ₹100 per quarter, including GST, if their wallets remain unused for more than one year.
The company said the fee will only apply to wallet balances and will not affect UPI transactions, bank accounts linked to PhonePe or users with zero wallet balances.
The move is aimed at managing inactive wallet accounts that continue to remain on the platform without any customer activity for extended periods.
Who Will Be Charged?
According to customer communications issued by PhonePe, the fee will apply only to users who meet specific conditions.
Wallet Inactivity Fee Criteria
| Criteria | Applicability |
|---|---|
| Wallet inactive for more than 1 year | Yes |
| Wallet balance of ₹1 or more | Yes |
| Zero-balance wallet | No |
| Active wallet users | No |
The company clarified that only customers who have not used their PhonePe wallet for over 12 months will be affected.
Fee Amount and Deduction Process
PhonePe will charge:
Wallet Maintenance Fee
- ₹100 per quarter (including GST)
- Deducted directly from the wallet balance
- Applicable every quarter while inactivity continues
The fee will be debited automatically from the wallet.
What Happens If Balance Is Less Than ₹100?
PhonePe stated that users with balances below ₹100 will not be charged beyond their available funds.
For example:
| Wallet Balance | Amount Deducted |
|---|---|
| ₹250 | ₹100 |
| ₹100 | ₹100 |
| ₹75 | ₹75 |
| ₹20 | ₹20 |
| ₹0 | No charge |
This means the company will deduct only the available wallet balance if it is below the fee amount.
Users Will Receive Prior Notice
PhonePe said customers will receive advance communication before any deduction takes place.
According to the company:
- Users are notified before the fee is charged.
- Notifications are sent approximately 15 days in advance.
- Customers can use their wallets before the fee becomes applicable.
The advance notice is intended to give users an opportunity to reactivate dormant accounts if they wish to avoid the charge.
What Is a PhonePe Wallet?
A PhonePe wallet is a prepaid payment instrument that allows users to:
- Store money digitally
- Make merchant payments
- Pay bills
- Conduct transactions within supported services
The wallet is separate from:
- UPI transactions
- Linked bank accounts
- Debit cards
- Credit cards
The new fee applies only to balances maintained within the PhonePe wallet itself.
UPI Users Largely Unaffected
The majority of PhonePe users primarily use the platform through UPI-linked bank accounts.
Since the inactivity fee is restricted to wallet balances, most regular UPI users are unlikely to be impacted.
The policy does not affect:
- UPI payments
- Bank account balances
- Linked savings accounts
- Merchant UPI transactions
- QR code payments through bank accounts
Only dormant prepaid wallet balances fall under the new rule.
Why Companies Charge Inactivity Fees
Inactivity fees are not uncommon in the financial services and payments industry.
Companies often incur operational and compliance costs for maintaining inactive accounts, including:
- Account management
- Regulatory compliance
- Record retention
- System maintenance
- Customer support obligations
Dormant account fees are sometimes introduced to encourage users to either reactivate accounts or withdraw unused balances.
What Wallet Users Can Do
Customers who wish to avoid the fee can:
Use the Wallet
Completing a wallet transaction may reset inactivity status, subject to the platform’s terms and conditions.
Withdraw Available Balance
Users may choose to utilize or transfer available wallet funds where permitted.
Monitor Notifications
PhonePe says users will receive alerts before any maintenance fee is deducted.
Consumers should review official communications from the company for account-specific details.
Growing Focus on Wallet Management
The digital payments industry has increasingly focused on managing inactive accounts as transaction volumes and customer bases continue to expand.
With millions of users maintaining digital payment accounts across multiple platforms, service providers are reviewing policies related to dormant balances, account maintenance and customer engagement.
PhonePe’s latest move reflects a broader trend among financial service providers seeking to address long-term inactive accounts while maintaining operational efficiency.
Outlook
PhonePe’s new ₹100 quarterly Wallet Inactivity Maintenance Fee will affect only customers who have not used their wallets for more than a year and still maintain a positive balance. While the majority of UPI users are unlikely to be impacted, wallet holders should review their account activity and monitor notifications from the company to understand whether the new policy applies to them.
As India’s digital payments ecosystem continues to mature, account maintenance policies such as these are likely to become an increasingly important aspect of customer account management and fintech operations.
Source: Bext Reporting and Company Communication
