Google Pay users who have been making free transactions will now see a convenience fee for specific bill payments. The platform has started charging fees for transactions made using credit and debit cards, moving away from its previous approach of covering these costs.
New Charges for Card-Based Payments
The newly introduced fees range from 0.5 percent to 1 percent of the transaction amount, plus applicable GST. However, UPI payments directly linked to bank accounts remain free. The charges apply to bill payments such as electricity and cooking gas when paid via credit or debit cards.
Earlier Steps Towards Paid Transactions
This change follows a similar move by Google Pay over a year ago when it introduced a small fee for mobile recharges above a certain amount. Users have now reported deductions labelled as “processing fees” for credit and debit card bill payments.
Shift Towards Sustainable Revenue Models
Fintech companies, including Google Pay, are increasingly passing transaction costs to customers instead of absorbing them. As UPI usage continues to grow, platforms are adjusting their strategies to balance growth with sustainable revenue generation.
Google Pay’s UPI Market Share
Google Pay processes around 37 percent of UPI transactions and handled transactions worth ₹8.26 lakh crore in January 2025. Introducing platform fees aligns with industry trends, as many fintech companies implement similar policies to cover processing costs.
Similar Fees on Other Platforms
Other digital payment apps have already adopted comparable strategies. PhonePe charges a convenience fee for bill payments made via credit or debit cards, while Paytm applies a platform fee of ₹1 to ₹40 for mobile recharges and utility bill payments via UPI.
Challenges in Monetizing UPI Transactions
Despite UPI’s widespread adoption, generating direct revenue from these transactions remains a challenge for fintech companies. The introduction of platform fees helps them recover payment processing costs while maintaining operational sustainability.