Google Pay Introduces Convenience Fees on Bill Payments – Here’s What You’ll Pay!
Google Pay has announced the introduction of a convenience fee for bill payments such as electricity and cooking gas.
Google Pay has announced the introduction of a convenience fee for bill payments such as electricity and cooking gas. The charges apply to users paying via debit and with credit cards, with fees ranging from 0.5% to 1% of the transaction amount, along with GST.
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This move follows Google Pay’s earlier decision to impose a ₹3 convenience fee on mobile recharges last year. The latest fee structure highlights a shift toward monetizing UPI-based transactions, as fintech companies seek to balance growth with sustainable revenue models.
Fintech Platforms Increasing Transaction Fees
Google Pay is not the only platform charging additional fees. Competitor PhonePe also applies convenience fees for bill payments made via debit or credit cards, covering services like water, electricity, and piped gas. Similarly, Paytm levies charges between ₹1 to ₹40 for mobile recharges and bill payments through UPI.
Also Read: NPCI Revamps UPI System: Auto Chargeback Acceptance to Streamline Transactions
Google Pay’s Market Position and UPI Growth
With a 37% market share in UPI transactions, Google Pay is the second-largest player after Walmart-backed PhonePe. In January 2025, Google Pay processed UPI transactions worth ₹8.26 lakh crore. Despite the widespread adoption of UPI, fintech firms struggle with high processing costs, making monetization strategies crucial for long-term sustainability.
Rising Costs of UPI Transactions
A PwC report states that processing UPI person-to-merchant transactions incurs an average cost of 0.25% of the transaction value. In FY24, UPI transactions cost fintech companies nearly ₹12,000 crore, with ₹4,000 crore spent on transactions below ₹2,000.
UPI’s Continued Expansion
Despite financial challenges, UPI continues its rapid growth. In January 2025, total UPI transactions reached 16.99 billion, amounting to ₹23.48 lakh crore—a 39% year-on-year increase.
As fintech firms adjust their revenue models, Google Pay’s new fee structure signals an industry-wide shift toward recovering operational costs, while UPI remains central to India’s digital payments ecosystem.
