Google Pay Starts Charging Convenience Fees of Up to 1% on These Types of Payments
Google Pay Starts Charging Convenience Fees of Up to 1% on These Types of Payments
New Delhi, February 21, 2025: Google Pay, one of India’s leading UPI-based payment platforms, has started charging a convenience fee for bill payments made using credit and debit cards. The charges range from 0.5% to 1% of the transaction value, plus applicable GST, shifting the cost burden from the company to consumers.
Key Highlights:
- Applies to Credit/Debit Card Transactions: Users paying for utility bills, such as electricity and gas, via credit or debit cards on Google Pay will now incur a processing fee.
- UPI Bank Transactions Remain Free: Payments made directly from a bank account using UPI will continue to be free of charge.
- Industry-Wide Trend: Other digital payment platforms, including PhonePe and Paytm, also levy similar fees on bill payments, mobile recharges, and other services.
- Rising Costs for Fintech Firms: According to a PwC report, fintech companies collectively incurred an estimated Rs 12,000 crore in costs for processing UPI transactions in FY24, prompting firms to explore new revenue streams.
The Indian government had waived the Merchant Discount Rate (MDR) for UPI transactions below Rs 2,000 in 2020 to promote digital payments. While the government reimburses costs for such transactions, digital payment platforms continue to face revenue challenges.
Despite these financial pressures, UPI transactions in India remain on an upward trajectory. In January 2025, UPI recorded 16.99 billion transactions worth Rs 23.48 lakh crore, marking a 39% year-on-year growth.
