Tag: mobile recharge

Google Pay Said to Begin Collecting Convenience Fee on Mobile Recharge Transactions

Google Pay has reportedly begun charging users a convenience fee when they purchase a mobile recharge plan via the app’s unified payments interface (UPI) service. After years of allowing users to recharge their prepaid plan and pay bills at no additional cost, it appears that the company has joined rival payment platforms Paytm and PhonePe in charging users for prepaid recharge payments made via Google Pay. The search giant is yet to make an announcement related to the introduction of convenience fees on its payment app.

A user recently reported on an online forum that Google Pay has begun charging a convenience fee for mobile recharge plans on the payment service. A screenshot shared by the user shows that Google added a Rs. 3 convenience fee to the Rs. 749 prepaid recharge plan from Jio. The screenshot indicates the convenience fee is inclusive of GST. The user adds that the convenience fee shows up for both UPI and card transactions.

Google Pay levied a Rs. 3 convenience fee on the Jio recharge transaction
Photo Credit: Desidime/ ankushthehero123465

 

Tipster Mukul Sharma revealed additional details of the convenience fees for the platform via X (formerly known as Twitter). Mobile recharge plans worth less than Rs. 100 will not be charged a convenience fee, while recharge plans that cost up to Rs. 200 and up to Rs. 300 will be charged Rs. 2 and Rs. 3, respectively, according to Sharma. Transactions worth more than Rs. 300 will charged a Rs. 3 convenience fee.

MySmartPrice spotted that the company updated the Google Terms of Service for users in India earlier this month and a Google Fees appears to address the new convenience fees. However, it is unclear whether the section was added recently as part of the November 10 update. “Fees may be applied to certain Transactions or use of Google Pay Services which include but are not limited to mobile recharges,” the section states. Google’s terms state that users will be notified of applicable fees before the transaction is completed.

The updated terms of service also states that fees might be determined by the company at its own discretion — Gadgets 360 staff members were not shown the additional charge when attempting to purchase Airtel and Jio recharge plans on Thursday.

It appears that purchasing recharge plans via the operator’s website is the only way to avoid convenience fees. It is worth noting that Google Pay isn’t the first payment service provider to charge additional fees for transactions. These charges were previously introduced by rivals Paytm and PhonePe, similar to other online services for ordering food online or booking movie tickets, as a means to monetise their payment platforms. 

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After PhonePe, Paytm Starts Taking Surcharge on Mobile Recharges

Paytm has started taking a surcharge for mobile recharges through its platform. The charge can be anywhere between Re. 1 and Rs. 6 — depending on the recharge amount. It is applicable on all Paytm mobile recharges, irrespective of the payment mode — whether done through Paytm Wallet balance or Unified Payments Interface (UPI) or bank credit or debit card. The update is notably not applicable to all users at this moment. Last year, Paytm competitor PhonePe started a pilot to charge a surcharge on mobile recharges.

According to user reports available on Twitter, Paytm started taking the surcharge as a convenience fee, though Gadgets 360 can now confirm that the additional charge is available as a platform fee. It appeared to be initially rolled out to a few users in late March. However, the sudden increase in the recent user reports suggest that the update is now applicable to a large number of users.

Gadgets 360 was able to independently verify that the surcharge is not applicable to all Paytm users at this moment. It is also important to note that the additional charge is applicable on transactions above Rs. 100.

Paytm is taking surcharge on mobile recharges from some users

 

However, the select users who have been considered as a part of the update need to pay up to Rs. 6 as an additional charge over and above the mobile recharge amount that they are paying through the Paytm app.

A person familiar with the development told Gadgets 360 that Paytm was taking the surcharge from some users as one of the experiments to grow its revenues.

In 2019, Paytm posted on Twitter to claim that it would not charge any convenience or transaction fee from customers on using any payment method which included cards, UPI, and wallet.

 

A query sent to Paytm didn’t elicit a response at the time of publishing this article.

Similar to Paytm, PhonePe in October started charging a surcharge that it calls “processing fee” to customers for mobile recharges above Rs. 50. The Walmart-owned company at the time said that the charge was applicable under a “small-scale experience” and was not affecting all users.

User reports available on social media, though, indicate that the number of users seeing the additional charge on their PhonePe account is not minuscule as hundreds of users have reported that the platform is levying the additional charge for their mobile recharges.

Both PhonePe and Paytm have yet not officially revealed the criteria that they use to pick customers for charging the additional fee.

A PhonePe spokesperson declined to comment on queries around its criteria for the experiment and the total base of its users selected for the surcharge.

Payment Council of India (PCI) Chairman Vishwas Patel told Gadgets 360 that telcos in the country recently reduced commission to around 50 percentage-in-point (pip) on transactions to the online retailers. In addition to that, he noted that if a customer was paying through a credit card, where the merchant discount rate (MDR) is 1.8 percent, it was not possible for the online retailer to process recharges.

Nevertheless, platforms including Amazon Pay and Google Pay are not charging any additional charges for mobile recharges at this moment. Some of the price-conscious users are, therefore, moving their recharge tasks to these platforms for the time being.

Telecom operators including Airtel, Vi and Jio also support mobile recharges through their native apps. The surcharge by Paytm and PhonePe could, thus, be an opportunity for telcos to incline customers towards their solutions over time.



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