In a significant move, UPI platform Google Pay has introduced a convenience fee for electricity, gas bill payments which will charge customers who have till now been using the platform for free when doing low-value transactions, a report by Economic Times said. There has been no comment from the UPI platform GPay on the matter and there is no official confirmation on this yet.
The charges will apply to debit and credit card payments with the fee that will range from 0.5% to 1% of the transaction value and also the applicable GST. This comes after Google Pay had in 2023 decided to introduce a convenience fee of Rs 3 for mobile recharges.
The ET report claimed that a customer was charged Rs 15 as ‘convenience fee’ when he was paying his electricity bill via his credit card. This fee was labelled as a “processing fee for debit and credit card transactions” and GST was also included in this.
The report quoted a person familiar with the matter saying that GPay’s introduction of platform fees for bill payments will be a much significant shift towards monetising the transactions that are done via UPIs, when service providers are simultaneously looking for ways to offset the costs of processing payments.
The introduction of platform fees is slowly becoming a norm, as many fintech companies are trying to pass on transaction costs to the customers. According to Google Pay’s website, this fee helps cover the costs of processing card payments, but it’s unclear when this change started.
Other platforms are following the similar trend. PhonePe charges a fee for certain bill payments that are done using credit or debit cards, and Paytm charges a fee between Rs 1 and Rs 40 for mobile recharges and utility bill payments through UPI.
Even though UPI is very popular, making money directly from these transactions is still a challenge for fintech companies.
Further details on this matter are awaited.