PhonePe will charge a quarterly inactivity fee of up to ₹100 on digital wallets that remain unused for 12 months [1], [2], [3].

This move targets a significant portion of the Indian digital economy as the company seeks to manage the costs of maintaining dormant accounts. With an estimated 74 crore dormant wallets across India [4], the policy aims to encourage active usage or the closure of unused accounts.

The fee applies specifically to wallets that have not seen activity for 365 days [2]. The company said the charge is intended to offset the operational costs associated with keeping these inactive accounts on its servers [1], [3]. This approach mirrors practices common in the traditional banking sector, where maintenance fees are often applied to accounts that lack a minimum balance or activity.

Digital payments in India have seen a massive shift toward the Unified Payments Interface (UPI), which now accounts for 85.5% of digital payments in the country [4]. As users migrate toward direct bank-to-bank transfers via UPI, standalone digital wallets have seen a decline in daily utility for some consumers.

Users can avoid these charges by performing a transaction within the wallet at least once a year. The fee structure is designed to trigger only after the full 12-month period of inactivity has passed [2].

PhonePe said the fee helps the platform maintain its infrastructure while encouraging users to engage with the wallet services more frequently [1], [3].

“PhonePe will levy a quarterly inactivity fee of up to ₹100 on wallets that have not been used for 12 months.”

This policy highlights the evolving landscape of Indian fintech, where the dominance of UPI is making traditional digital wallets less essential. By monetizing dormant accounts, PhonePe is addressing the financial burden of 'ghost' accounts while pushing users toward more active engagement in a highly competitive market.