Google Pay Introduces Convenience Fee On Bill Payments Via Credit, Debit Cards

SUMMARY

Tech giant Google has begun levying a ‘convenience fee’ on bill payments made with credit and debit cards on its UPI platform Google Pay

Google Pay’s convenience fee ranges from 0.5% to 1% of the transaction value, along with the applicable goods and services tax (GST)

“The convenience fee helps cover the costs associated with processing credit or debit card payments,” said Google Pay on its FAQ page

Taking a leaf out of IPO-bound PhonePe and fintech giant Paytm’s book, tech giant Google has begun levying a ‘convenience fee’ on bill payments made with credit and debit cards on its UPI platform Google Pay.

Google Pay’s convenience fee ranges from 0.5% to 1% of the transaction value, along with the applicable goods and services tax (GST), ET reported. The platform charges customers when they’re paying electricity, television, water and cooking gas bills via debit and credit cards.

However, this convenience fee does not apply to UPI payments made directly through bank accounts.

“The convenience fee helps cover the costs associated with processing credit or debit card payments,” a post by Google Pay on its FAQ page read.

It further said that convenience fees can be subject to changes in the future, adding that the latest platform fee details are displayed at the time of payment.

It is pertinent to note that Google Pay has also been charging a convenience fee of INR 3 for mobile recharges since last year. This convenience fee applies to both UPI and card payments.

Charging a convenience fee, a platform fee, or a similarly worded additional charge is considered normal practice in the online services industry.

PhonePe also levies a convenience fee for bill payments, including water, piped gas and electricity, white Paytm charges anywhere from INR 1 to INR 40 as platform fees for recharges via UPI and bill payments, including credit card payments.

However, concerns arise due to a lack of regulation over the amount of fees charged. Last year, BookMyShow and Paytm were accused of anti-competitive practices for charging exorbitant ‘handling fees’ on online movie tickets.

Google Pay is currently the second largest UPI player in India with a 37% market share as of January 2025, trailing behind only PhonePe, which holds a 48.4% market share. Despite the boom in UPI adoption, fintech companies have struggled to convert such payments into a significant revenue driver.

According to a PwC report, stakeholders (including payer’s banks, UPI app providers and NPCI) typically incur a cost of nearly 0.25% of the transaction value for processing a UPI person-to-merchant (P2M) transaction.

In the fiscal year 2023-24 (FY24), stakeholders incurred a cost of INR 12,000 Cr for processing UPI P2M transactions but were incentivised with only INR 3,000 Cr.

Google Pay’s latest move reflects a broader trend of companies attempting to monetise UPI transactions to offset processing costs as UPI adoption gains momentum.

The number of transactions processed on UPI hit an all-time high of 1,699 Cr in January, with the total value of transactions standing at INR 23.84 Lakh Cr.