Tech Desk: PhonePe, a leading UPI app in India, has ignited widespread user backlash by introducing a controversial ₹100 quarterly inactivity fee on dormant wallet accounts. This charge applies to wallets that have seen no activity for 365 consecutive days, crucially, excluding regular UPI payments or simple app logins. Only actual wallet transactions, like adding or spending money from the wallet, count towards resetting the inactivity clock. Many users express frustration, claiming they were unaware of having active wallets or the impending charges, leading to a wave of complaints across social media platforms.

The fee, which also includes GST, is deducted directly from the wallet balance. PhonePe states it will clear the balance to zero rather than pushing it into negative territory if the available amount is less than ₹100. This move, while not entirely unprecedented in the Indian fintech space—MobiKwik introduced an inactivity charge in 2021, and Airtel Payments Bank previously levied similar fees—has triggered a fresh wave of public anger. Users are particularly upset about being charged for a service they often didn’t actively choose to use, highlighting the friction involved in managing or fully exiting these digital accounts.

PhonePe defends the implementation of this ‘PhonePe inactivity fee’ by citing RBI-related compliance norms and the operational costs associated with maintaining these dormant accounts. However, the company’s communication strategy around this new policy has been heavily criticized. The perceived lack of clear, proactive information and the retrospective nature of the charge for many users have fueled the controversy, raising significant questions about consumer awareness, transparency in digital financial services, and the ease with which users can manage or opt out of such services.