PhonePe has sparked user backlash after introducing a ₹100 quarterly inactivity fee on dormant wallet accounts. The charge applies if wallets remain unused for 365 days, with only wallet transactions counting as activity. Users say they were unaware of having active wallets, while PhonePe claims the move aligns with RBI-related compliance norms and maintenance costs.

PhonePe, one of India's most widely used UPI apps, has set off a wave of online frustration after rolling out an inactivity fee for its in-app wallet feature, a charge many users say they didn't even know they could be subject to.vAccording to the updated terms, PhonePe will levy a Rs. 100 fee, plus GST, every quarter on wallets that have seen no activity for 365 consecutive days.

Crucially, the inactivity clock isn't reset by regular UPI payments or simply logging into the app, only actual wallet transactions, like loading money into the wallet or spending from it, count as activity. The fee will be deducted directly from the wallet balance. If the balance is less than Rs. 100, PhonePe will deduct whatever is available, leaving the wallet at zero rather than pushing it into negative territory.

The company says it will give users a heads-up before the deduction kicks in. A 15-day advance notice will be sent via an SMS before the fee is applied. PhonePe has framed the move as compliance with RBI guidelines meant to cover the cost of maintaining inactive wallet accounts.

PhonePe change in policy sparks user backlash