Inactivity fees on dormant PhonePe wallets do not affect users' linked bank accounts or UPI transactions, according to clarifications issued by the company after notifications sent to some customers triggered confusion over how digital wallets operate. The notifications apply only to the PhonePe Wallet, a prepaid payment instrument (PPI), and not to payments made through the Unified Payments Interface (UPI), where funds are debited directly from a user's bank account. The issue has highlighted a common misconception among consumers that their PhonePe account, UPI account and PhonePe Wallet are the same product. In reality, they operate independently and are subject to different rules.