PhonePe has stepped in to clear up confusion among users after some customers received notifications about inactivity charges on their wallets. The digital payments platform confirmed that these fees are strictly limited to dormant wallet balances and will not be deducted from a user’s linked bank account or affect their UPI transactions in any way.
The issue began when certain PhonePe users got alerts about inactivity charges of up to Rs 100 per quarter, applicable to wallets that had remained unused for more than 12 months. This left many customers worried about whether the company could recover these charges from their bank accounts or through UPI if their wallet balance was not enough to cover the fee.
Wallets and Bank Accounts Are Separate
PhonePe explained that the inactivity fee applies only to the PhonePe Wallet, which functions as a prepaid payment instrument and operates independently from a user’s bank account. The company also stated that if a wallet has zero balance and stays inactive, no amount will be pulled from the bank account or UPI to cover the fee. Importantly, wallet balances will never go into negative numbers because of these inactivity charges.
According to PhonePe, much of the confusion came from users not realizing that UPI activity and wallet activity are two completely different things. UPI payments are processed directly through a linked bank account, while the wallet holds a separate balance altogether. This means someone could be using PhonePe daily for scanning QR codes, paying bills, or transferring money through UPI, while their wallet sits untouched for months or even years.
The company added that users get a notification fifteen days before any inactivity fee is actually deducted from their wallet. This gives them time to either reactivate the wallet, add money to it, withdraw any remaining balance, or simply decide not to continue using the wallet feature.
PhonePe further noted that such inactivity or maintenance charges are common practice across the prepaid payments industry and are meant to cover compliance and operational costs tied to maintaining dormant accounts. The company clarified that this approach is not exclusive to PhonePe and is followed by other wallet providers as well.
