Like other players, PhonePe is also charging processing fee for payments made through credit cards.
“On Recharge, we are running a very small scale experiment where some users are paying for mobile recharge. Recharges below Rs 50 are not charged, recharges between Rs 50 and Rs 100 are charged. Rs.2 is charged for Rs.100 and above Rs.100. Essentially, as a part of the experiment, most users are either not paying anything or not paying Re 1,” says PhonePe spokesman said.
PhonePe has the largest share in terms of UPI Transactions between third-party apps. The company had recorded over 165 crore UPI transactions on its platform in September, with the app segment accounting for over 40% share.
To clarify on Bill Payments, “We are not the only player or payment platform to charge a fee. Charging a small fee on bill payment is now a standard industry practice and is also done by other biller websites and payment platforms. We charge a processing fee (called as convenience fee on other platforms) only on credit card payments,” the spokesperson said.
According to a Bernstein report released in July, PhonePe and Google Pay continued to spend 2.5-3.0x on customer incentives and marketing, while Paytm reported 0.4x revenue from 1.2x in FY2017. Marketing spending is streamlined. In FY20, and now at 0.2 times the revenue (FY21), while growing merchant payments share in wallets, UPI, PoS and online payments.
The National Payments Corporation of India has put a cap on the market share for UPI. There cannot be any player whose market share is more than 30%.
The Bernstein report said that PhonePe and Google Pay would need to dial up their customer incentives for the NPCI market share cap, to bring the stock towards the 30% cap.