New Delhi, June 20 (IANS). After the recent wallet inactivity notification sent by PhonePe, consumer interest in digital wallets and how they work has increased. An important thing that has come to light during these discussions is that many users still believe that their PhonePe account, UPI account and PhonePe wallet are the same thing. Whereas in reality these are different payment mediums, which work independently and serve different purposes.
As digital payments are becoming a part of people’s everyday lives, it is important to understand how a wallet works and how it is different from UPI. This helps consumers make better decisions and understand the products they are using.
What is the difference between UPI and wallet?
When you pay through UPI on PhonePe, the money is deducted directly from your linked bank account. On the other hand, PhonePe wallet is a prepaid payment instrument (PPI), in which the money is kept separate from your bank account.
This distinction is important because inactivity charges apply only to PhonePe wallets and not to UPI linked bank accounts.
How does wallet inactivity fee work?
Many users have a question in their mind that if there is no balance in their wallet, can PhonePe deduct inactivity fee from their bank account? The answer is – no.
If a user’s PhonePe wallet has been inactive for a long time and has zero balance, the inactivity fee will not be charged to his bank account or through UPI. Similarly, the wallet balance will also not be negative.
In other words:
-No deduction will be made from the linked bank account.
-No amount will be deducted through UPI.
-Wallet with insufficient balance will not show negative balance.
Why can I receive notifications despite regular PhonePe usage?
Some users have complained that even though they use PhonePe regularly, they still received deactivation notifications. This happens because wallet activity and UPI activity are tracked separately.
It is possible that a customer makes QR code payments, bill payments or transfers money through UPI on a daily basis, but his PhonePe wallet has not been used for months or years. In such cases the wallet may be considered inactive even if the user is using the PhonePe app regularly.
Advanced notifications and user options
According to PhonePe, affected users are informed 15 days before any inactivity charges are deducted.
During this period, users have the following options:
-Activating your wallet.
-Adding money to the wallet if they want to continue using it.
-Withdraw eligible balance.
-Deciding whether they want to maintain the wallet or not.
Common questions regarding KYC
Some users believe that to reactivate the wallet they will have to do full KYC. However, it is not necessary to convert a wallet with minimum KYC to full KYC to activate the wallet.
Users can activate their wallet by completing the OTP verification and making a transaction through the wallet. Getting full KYC done is not a mandatory condition for activation.
Confusion regarding wallet balance and cashback
Another confusion related to cashback has also come to light. Many users believe that the cashback amount is deposited in their PhonePe wallet. Whereas in reality the cashback is usually credited to a separate gift card balance, which is separate from the PhonePe wallet.
Therefore, receiving cashback does not mean that your wallet is active nor does it mean that wallet deactivation charges will be applicable on that cashback amount.
Wallet closure and customer support
Some users have reported issues such as error messages or additional verifications when trying to close their wallet through the app.
In such a situation, users are advised to close the account or contact PhonePe customer support to resolve wallet related issues.
Why are inactivity fees charged?
Wallets are regulated as prepaid payment instruments and require maintenance, compliance and operational support even if they are not being actively used.
This is why some wallet providers charge inactivity or maintenance fees on wallets that have been inactive for a long time. This is not limited to just one company but is a practice adopted by many wallet providers in the prepaid payments sector.
The most important thing in this whole matter is that inactivity fee is applicable only on PhonePe wallet, which is a separate prepaid payment instrument. It does not apply to UPI transactions, does not affect the bank account and does not take the wallet into negative balance.
The most important step for users who have received such a notification is to check whether they have an active PhonePe wallet and then decide whether they want to continue, reactivate or deactivate it.
–IANS
DBP
