Google Pay rolls out convenience fee on utility payments. Check details | Mint
Source: Live Mint
Google Pay starts levying convenience fee on payments made via credit and debit card for utilities such as cooking gas and electricity, reported Economic Times. This used to be free earlier. The fees are subject to Goods and Services Tax and amount to 0.5% to 1% of transaction value. This move by Google Pay was followed by a similar move by other UPI platforms such as PhonePe and Paytm.
How much does it cost users?
Users who used credit cards for power bill payments received “convenience fees” amounting to approximately ₹15, reported ET. The fee labelled as “processing fee for debit and credit card transactions” incorporated GST as part of its total amount. Any payment made through UPI to directly linked bank accounts remains completely free of charge.
Evaluation of this UPI platform against other platforms exists
Past digital payment platforms including Google Pay have brought in similar fees. PhonePe collects convenience charges when users pay their electricity and water and piped gas bills through their card service, added ET.
Other than UPI recharges Paytm demands different bill payment fees including credit card settlements and gas and water bills that depend on the transaction amount between ₹1 to ₹40. Digital payment platforms have begun adopting transaction monetisation approaches as a method to finance their operating expenses according to emerging industry trends.
Impact on users
The most recent UPI modification appears to affect only those customers using linked bank accounts whereas individuals using credit or debit cards should reassess their payment methods to avoid further charges. A lot of users are currently discussing this decision while many individuals use social media platforms to voice their worries. Some digital payment users question that these fees harm electronic payment popularity yet other consumers accept the necessity for fintech companies to establish sustainable financial revenue streams.
Major payment companies have modified the Indian digital payments ecosystem through the implementation of convenience fees. The UPI system maintains free services for bank account-linked transactions but there exists uncertainty surrounding possible fees for additional services which may provide profit to the platforms.
