Mobile applications have become an integral part of our lives. From ordering food to booking rides, apps have revolutionized the way we interact with businesses and access services. However, behind the scenes, service providers often charge a platform fee to sustain their operations. In this blog, we will look into the concept of platform fees on mobile apps, exploring what they are, how they work, and why they are essential for the app ecosystem.
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Paytm, in 2022, along with other UPI apps started levying platform fees on specific services such as recharges, bill payments etc.
Platform fee can also be named as convenience fee since it is levied to improve the customer experience and support the product or service improvement through updated technology and innovation.
What Is the Meaning of Platform Fee?
A platform fee is a cost that you have to pay when you use an online platform to do things like book a place to stay, buy things, or sign up for services. The fee helps the platform cover the expenses of running the website, like keeping it secure and providing customer support. It also helps the platform make improvements and give you a better experience. So basically, the fee is necessary for the platform to stay in business and give you good service.
Why Platform Fee?
Let us understand why does platforms charge a platform fee:
- A huge amount of funds are dedicated to the developing and maintaining of the platform. From technology, security of data to customer support, all these operational costs are a reason for platform fee.
- Between the sending and receiving of money, there incurs a cost of processing, ensuring the security, refunds and disputes which is covered through the platform fee.
What Does it Mean for the Consumers
Consumers are now required to pay a modest percentage of the total payout amount for services being offered. This platform fee is reinvested into service enhancements aimed at improving user experience.
While introducing a new cost element, the fee supports ongoing improvements essential for maintaining and upgrading the platform’s functionality.
What is Platform Fee in Paytm?
Paytm convenience fee starts from Rs 1 and it is levied depending on the amount of service.
Let us take a few examples and understand realistically what is the maximum platform fee that paytm levies on bills.
| Bill Amount | Maximum Platform fee charged |
|---|---|
| Below Rs 1,000 | Rs. 4 |
| Between Rs 1,001 to Rs 5,000 | Rs. 8 |
| Between Rs 5,001 to Rs 40,000 | Rs. 20 |
| Above 40,000 | Rs. 30 |
What Are the Services Under Which You’ll Have to Pay Platform Fee?
Paytm charges platform fees on all modes of payment. It is applicable on recharges using UPI, paying bills such as utilities including gas, water, credit card payments and other activities including visa network cards.
At Paytm, the entire process of payment is clean and transparent for the users. “Platform fee” indicates the amount you are paying on your order. While placing an order, before payment, you will find the breakdown of the final amount that shows the product price, taxes applicable and platform fee charged separately for a better user understanding.
Disclaimer: This blog is written to make it easy for readers to understand complicated processes. Some information and screenshots may be outdated as government processes can change anytime without notification. However, we try our best to keep our blogs updated and relevant.
