Digital payments platform PhonePe has clarified that inactivity fees on dormant wallets will not affect users’ linked bank accounts or UPI transactions after notifications sent to some customers triggered confusion over the policy.<\/p>\n
The clarification comes after users received notifications regarding inactivity charges of up to Rs 100 per quarter on PhonePe wallets that have remained inactive for over 12 months. The alerts sparked concerns among users over whether the charges could be recovered from linked bank accounts or through UPI if wallet balances were insufficient.<\/p>\n
According to the company, the inactivity fee applies only to the PhonePe Wallet, a prepaid payment instrument (PPI) that operates separately from a user’s linked bank account.<\/p>\n
PhonePe said that if a wallet has a zero balance and remains inactive for an extended period, no fee will be recovered through the user’s bank account or UPI. The company also clarified that wallet balances will not become negative due to inactivity charges.<\/p>\n
The confusion largely stemmed from the distinction between UPI usage and wallet activity. While UPI transactions are processed directly through linked bank accounts, wallet balances are maintained separately. As a result, a customer may use PhonePe regularly for QR code payments, bill payments, and money transfers through UPI while their wallet remains inactive for months or years.<\/p>\n
The company said users receive a notification 15 days before any inactivity fee is deducted from the wallet balance, allowing them to reactivate the wallet, add funds, withdraw eligible balances, or choose whether they wish to continue maintaining the wallet.<\/p>\n
PhonePe added that inactivity or maintenance charges are levied on dormant prepaid payment instruments to cover compliance and operational requirements. The practice is not unique to PhonePe and is followed by multiple wallet providers in the prepaid payments ecosystem.<\/p>\n
The Walmart-backed fintech firm further clarified that wallet inactivity is tracked separately from UPI activity. Consequently, customers who actively use PhonePe for UPI payments may still receive inactivity notifications if their wallet has remained unused for an extended period.<\/p>\n
Disclaimer:<\/p>\n
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