UPI platform Google Pay plans to introduce convenience fees for electricity and gas bill payments. Customers who have been using the platform for doing low-value transactions, will have to pay the convenience fee, a report by Economic Times said. Google Pay hasn't commented on the matter and there is no official confirmation on this yet.
The charges will apply to debit and credit card payments, and would apply from 0.5% to 1% charges of transaction amounts, plus the applicable GST. This follows Google Pay's 2023 decision for imposing convenience fees of ₹3 for mobile recharges. An insider source said that Google Pay has started introducing platform fees for bill payments in order to take a significant shift toward monetizing UPI transactions, especially now that service providers are looking at measures to recoup their costs in managing payment processing.
According to a report by The Economic Times, a customer was charged a convenience fee of Rs 15 each for paying credit card electricity bills through Google Pay. The fee was characterized as a processing fee for debit and credit card transactions with applicable GST.
The introduction of platform charges is fast becoming a common practice as many fintech companies are attempting to pass on transaction costs to customers. While UPI works as a great payment medium, monetizing these transactions still remains a challenge for the fintech companies.
Other platforms are also adopting the strategy, PhonePe charges fees for certain bill payments made using credit or debit cards, and Paytm levies a fee of between Rs. 1 and Rs. 40 for UPI-based mobile recharges and utility bill payments.
