PhonePe has indeed revised its terms, introducing a ₹100 (inclusive of GST) quarterly inactivity maintenance fee specifically targeting dormant accounts.

Because the announcement has triggered massive confusion online—with many users panicking that their bank accounts will be charged—the company has clarified exactly how this fee operates and who it actually affects.

1. What Triggered the Fee?

An account is classified as “Inactive” only if a user has not made a single financial transaction using their PhonePe Wallet for 365 consecutive days (one full year).

The platform states that the fee is levied to cover the backend compliance, security, and infrastructure costs required to keep dormant Prepaid Payment Instruments (PPIs) running.

2. Critical Clarifications (What Is NOT Affected)

To clear up the widespread panic on social media, PhonePe and financial regulators have emphasized the following boundaries:

• Your Bank Account is Completely Safe: PhonePe cannot and will not debit this fee from your linked bank accounts. It can only be deducted directly from your available PhonePe Wallet balance.
• No Negative Balances: If your wallet balance is zero, no fee will be charged. If your wallet has less than ₹100 (e.g., ₹30), the app will simply debit that remaining amount to bring the balance to zero. Your wallet balance will never go into the negative, and you won’t owe the company money.
• UPI Transactions Do Not Count as Wallet Activity: Simply opening the PhonePe app, checking your balance, making direct bank-to-bank UPI transfers, or doing mobile recharges via UPI does not keep your wallet active. The system specifically looks for transactions made using the wallet balance itself.

3. How the Alert & Grace Period System Works

Before any money is deducted, PhonePe triggers a mandatory alert workflow:

• 15-Day Advance Notice: If your wallet hits the 365-day dormant mark, you will receive multiple app notifications and SMS warnings 15 days before the fee is scheduled to be debited.
• The Quick Fix: To completely stop the deduction and return your wallet to “Active” status, you simply need to make at least one transaction using your wallet balance (or add money/OTP verify) during that 15-day grace period.