Paytm will now impose 2% fee for recharge using credit cards


Digital wallet platform, Paytm, has decided to levy a 2% fee when money is added to the wallet using credit cards.

There have been instances of users utilising the wallet service to get free credit, by topping up their wallets using credit cards. Subsequently, they would transfer the money back to their bank accounts, without availing any transaction costs. The introduction of the fee is to discourage customers from using the wallet for such purposes.

Paytm will, however, provide an equivalent cashback when a credit card is used to add money to the wallet. The cost associated with adding money to the wallet through other modes, i.e., debit cards and netbanking, will remain unchanged.

During the demonetization drive in November 2016, Paytm had introduced 0% platform fee. This was done to support merchants in accepting payments using the wallet. The platform was not charging any fee for transferring the amount back into the customer’s bank account.

In a recent blog post, Paytm mentioned that the company was paying hefty charges when customers use their credit cards at issuing banks and card networks. The digital payment wallet was incurring losses when the user adds money to the wallet and then transfers it back to the bank account.

Various users had pointed out on social media websites that the wallet was being used to access free credit and also earn credit card points in the process.

The proposed charges will take effect from 8th March, 2017. Paytm has also added Immediate Payment Service (IMPS) and UPI-enabled payment to instantly transfer funds between banks, through mobile phones. These gateways can be used for shopping, ticketing, bill payments, and filling the Paytm wallet. The platform currently has more than 200 million wallet users and plans to expand to 1 crore offline merchants.


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