PhonePe to charge fee on wallets inactive for over a year

MUMBAI: If your PhonePe wallet has been gathering digital dust, it may soon come with a housekeeping charge. PhonePe has revised its wallet policy and will begin levying a quarterly maintenance fee on wallets that remain inactive for an extended period, marking a move aimed at managing dormant accounts on its platform.

Under the updated rules, any PhonePe Wallet that does not record a financial transaction for 365 consecutive days will be classified as “inactive”. Once that status is triggered, users will be charged a maintenance fee of Rs 100 per quarter, inclusive of GST.

The company clarified that not every activity on the app counts towards keeping a wallet active. Logging into PhonePe, making UPI payments linked to a bank account, paying utility bills, recharging mobile numbers, purchasing insurance, servicing loans, making credit card payments or even completing wallet KYC formalities will not prevent a wallet from being classified as inactive.

Instead, only transactions carried out directly through the PhonePe Wallet will reset the inactivity clock.

The distinction highlights a growing gap between wallet usage and broader digital payment activity. While millions of users continue to use PhonePe regularly for UPI transactions, many no longer actively utilise the wallet feature itself, preferring direct bank-linked payments.

Before imposing the charge, PhonePe said it will notify affected users multiple times over a 15-day period and provide instructions on how to reactivate the wallet.

Users who complete a wallet transaction during this notice window will see their wallet restored to active status, avoiding the maintenance fee altogether.

The charge will be deducted directly from the wallet balance. If the balance is below Rs 100, PhonePe will deduct the available amount and bring the balance down to zero. The company said wallet balances will never become negative.

PhonePe stated that the inactivity fee is intended to support platform maintenance, system updates, bug fixes and service improvements associated with managing dormant wallets.

The policy mirrors practices adopted by several financial institutions and digital wallet providers globally, where inactive accounts often attract maintenance or dormancy charges after prolonged periods of non-use.

For consumers, the rule serves as a reminder that digital wallets are increasingly being treated like financial products rather than passive storage spaces. Keeping an account open may no longer be entirely free if it remains unused.

The simplest way to avoid the charge is straightforward: make at least one financial transaction through the PhonePe Wallet every 365 days.

In an era where digital payments happen in seconds, PhonePe appears to be signalling that inactivity, too, now comes with a price tag.