According to PhonePe, the charge will not result in a negative balance | Photo Credit: cueapi

Digital payments major PhonePe has begun notifying users that it will levy a quarterly “Wallet Inactivity Maintenance Fee” of ₹100, including GST, on dormant wallet accounts that have not been used for more than a year.

The fee will apply only to users who have at least ₹1 remaining in their PhonePe wallet and will be deducted from the wallet balance. Users with less than ₹100 in their wallets will have their entire balance debited, while zero-balance wallets will not be charged, the company said in a statement to customers.

“We sent out customer communication to users who haven’t used the PhonePe wallet in the past one year. These users will be charged a ‘Wallet Inactivity Maintenance Fee’ of ₹100 (including GST) per quarter,” a PhonePe spokesperson said.

The company added that users are notified 15 days before the fee is deducted and can avoid the charge by activating the wallet, topping it up, or withdrawing funds during the notice period.

No Negative Balance

According to PhonePe, the charge will not result in a negative balance. “Users with less than ₹100 in their wallet will be charged their entire wallet balance. The wallet balance will never be negative,” the spokesperson said.

The move applies only to the PhonePe wallet, which operates as a prepaid payment instrument (PPI), and does not affect users’ bank accounts linked through UPI.

“Wallet is a separate payment instrument and UPI linked bank accounts are a separate instrument. PhonePe will not debit money from any UPI linked bank account,” the company said.

PhonePe also clarified that users are not required to upgrade their minimum KYC wallets to full KYC wallets to reactivate them. “You can activate your MinKYC wallet by completing the OTP verification and making a payment using the PhonePe wallet,” it said.

Sustainable Revenue

Industry executives said some prepaid wallet providers have historically imposed inactivity or maintenance charges on dormant balances, arguing that maintaining wallet infrastructure, compliance systems and customer servicing entails recurring costs even when accounts are not actively used. The move comes at a time when digital payments companies are increasingly looking for sustainable revenue streams beyond core payment processing, where margins remain thin.

Published on June 19, 2026