SUMMARY
The platform is charging INR 1 for recharges in the range of INR 50 - INR 100 and INR 2 for recharges above INR 100
PhonePe has said that it is a “small scale experiment” and only a “few users” are paying the charges
In September, PhonePe had 44% share in the total UPI transactions in Inda,as it recorded 1.6 Bn transactions worth INR 3.06 Lakh Cr in September, according to NPCI data
Flipkart-owned digital payments platform PhonePe has started charging customers on mobile recharges.
The company, however, has said that only a few users are currently paying for their mobile recharges as it is running a “small scale experiment” and is not a full-fledged roll out of the processing fees on mobile recharges.
“We are running a small-scale experiment on the PhonePe platform where a few users are paying for mobile recharges. Recharges below INR 50 are not charged, recharges between INR 50-100 are charged INR 1 and above INR 100 are charged INR 2,” said a PhonePe statement.
It added that as a part of the experiment a majority of users are either not paying anything or paying only INR 1.
The Flipkart-owned fintech major is the first player in the segment to charge processing fees on online recharges.
The move, however, has not gone down well with several users and many have aired their concerns over the charge on social media and several tweets talking of shifting to another digital platform.
Its rival Paytm also took a swipe over the processing fee, tweeting: “Trust build karna bhi ek process hai. Iss process ki koi keemat nahi,” wherein it meant that building trust too is a process and there cannot be a cost to it.
The surprise move comes at a time when digital platforms are turning out to be the primary mode of several payments, billing and transactions for a large number of people in India. Fintech is taking over the traditional channels, with increased adoption of digital payments owing to the Covid-19 pandemic.
In September 2021, 3.65 Bn UPI transactions worth INR 6,54,351 Cr were recorded. In July and August 2021, the numbers were INR 6.06 Lakh Cr and INR 6.35 Cr, thus, representing the growth rate of transactions volume and value in September by 2.3%.
Data from the National Payments Corporation of India (NPCI) showed that PhonePe carried out 44% of the total UPI transactions — 1.6 Bn transactions worth INR 3.06 Lakh Cr in September.
Launched in 2015 by Sameer Nigam, Burzin Engineer and Rahul Chari, PhonePe offers a digital payments platform where consumers can send and receive money, recharge mobile, DTH, data cards, pay at stores, make utility payments and more. In 2016, ecommerce major Flipkart acquired the platform.
PhonePe has also been expanding its verticals of business aggressively. In August, the fintech unicorn received its insurance broking license from IRDAI to diversify into direct broking.
In addition, it also received approval from the RBI to function as an account aggregator.
Besides, PhonePe is also set to apply for its mutual fund’s license to play in the stock market. It will act as a sponsor/promoter to a mutual fund, an investment trust, or an asset manager. In addition, it could also incorporate and/or acquire asset management companies.
In the digital payments space, it competes with Paytm, Google Pay, BharatPe and Amazon Pay in this segment. Messaging platform WhatsApp also is in the fray for a full-fledged entry into the already crowded and robust digital payments ecosystem of the country.
