How Much Google Pay Is Charging On Bill Payments Via Credit, Debit Cards

Google Pay, one of India’s leading digital payment platforms, has announced the introduction of a convenience fee on bill payments made via credit and debit cards. This marks the end of the era of fee-free transactions for millions of users who rely on Google Pay for essential services like electricity and gas bill payments.

What is the New Convenience Fee?

According to Google Pay’s website, the newly imposed fee ranges from 0.5% to 1% of the transaction value, in addition to the applicable Goods and Services Tax (GST). However, transactions made directly through UPI-linked bank accounts will not be affected by this new fee.

This change follows Google Pay’s earlier decision to introduce a Rs 3 convenience fee for mobile recharges in 2024, signaling a shift toward monetizing services offered on the platform.

Why is Google Pay Introducing the Fee?

The new fee reflects a larger trend in the digital payments industry towards monetizing UPI transactions. As digital payments continue to grow in India, fintech companies like Google Pay are exploring ways to build financially sustainable business models. Google Pay, which holds nearly 37% of the UPI market share, is positioning itself for long-term profitability while continuing to dominate the digital payments space.

In January 2025, Google Pay processed transactions worth Rs 8.26 trillion, showcasing its significant presence in the market.

Other Platforms Follow Suit: PhonePe and Paytm

Google Pay is not alone in imposing charges on card payments. Competitors like PhonePe and Paytm have also introduced similar platform fees for bill payments.

• PhonePe charges fees on credit and debit card payments for utility bills such as water and gas.
• Paytm imposes platform fees ranging from Rs 1 to Rs 40 on UPI recharges and bill payments.

This growing trend of charging platform fees highlights a wider industry shift towards monetizing payment platforms, as the cost of processing digital payments continues to rise.

The High Cost of Processing UPI Transactions

In FY24, the total cost of processing UPI transactions amounted to approximately Rs 12,000 crore, with Rs 4,000 crore linked to low-value transactions below Rs 2,000. The Indian government has played a pivotal role in ensuring that UPI remains accessible by mandating that no Merchant Discount Rate (MDR) be charged on UPI transactions under Rs 2,000 to encourage adoption.

For transactions exceeding Rs 2,000, a merchant fee of 1.1% is allowed. These measures, along with reimbursements for MDR costs, have ensured UPI’s rapid growth in India.

UPI Usage Continues to Surge

The usage of UPI (Unified Payments Interface) has continued to rise at a remarkable pace in India. In January 2025 alone, UPI transactions totalled 16.99 billion, amounting to a staggering Rs 23.48 trillion in value. This reflects a 1.55% increase in transaction volume and a 1% rise in value compared to December 2024. On an annual basis, UPI transaction volume grew by 39%, underscoring its widespread adoption across the country.

What This Means for Consumers

The introduction of the convenience fee by Google Pay and other platforms signals the changing landscape of digital payments in India. As digital payment adoption increases, users may need to adjust to these new charges, particularly when paying bills via credit and debit cards. However, transactions made via UPI-linked bank accounts will remain unaffected, making it a more cost-effective option for users.

For those who prefer to avoid the convenience fee, using UPI-linked payments remains a viable and free alternative.