Mobile payments application Google Pay is all set to levy a convenience fee on customers using credit and debit cards to make bill payments. Such payments through the unified payments interface route remain free of charge.
According to two people in the know, the charges may vary from 0.5% to 1% of the transaction amount. The convenience fee amount charged can vary based on various factors, including the bill payment amount. The exact fee is displayed to customers at the time of bill payment.
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On its website, Google Pay describes this convenience fee as a way to "cover the costs associated with processing credit or debit card payments".
To be sure, these charges are applicable only for paying utility bills, such as television, water, gas, electricity, among other services, using debit or credit cards. The convenience fee for credit or debit card payments is displayed at the time of payment.
While Google Pay has started levying this charge now, other mobile payment applications such as Amazon Pay, PhonePe and Paytm already levy similar charges.
For example, in the case of Paytm, the fee is referred to as a "platform fee". A huge amount of funds are dedicated to the developing and maintaining of the platform. From technology, security of data to customer support, all these operational costs are a reason for platform fee, Paytm said on its website.
"Paytm, in 2022, along with other UPI apps started levying platform fees on specific services such as recharges, bill payments etc.," the mobile application said on its website.
On Amazon Pay, a convenience fees is applicable on electricity, landline/broadband, postpaid, water, municipal services, municipal tax, cable TV, education fees, piped gas and LPG.
The payments application levies 2.183% convenience fee for transactions using Mastercard, 1.18% for all transactions using non-ICICI Bank credit cards. In case of ICICI Bank credit cards, a 1.18% fee is levied for transactions above Rs 10,000. If a customer pays a bill using the Amazon Pay Later feature, a charge of 1.18% is levied on customers.
In the case of PhonePe, a convenience fee is levied if customers use credit or debit cards to make bill payments for services such as water, piped gas, and certain specific electricity service providers.
According to details available on PhonePe's website, a convenience fee will apply to customers who use debit and credits to pay bills from BESCOM Bangalore, MP Paschim Kshetra-Indore, Punjab State Power Corp., West Bengal State Electricity Board.
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