According to Paytm’s blog, the charge is to stop misuse of the wallet by using credit cards to recharge it and then transfer the money back to the bank. In the process the user earns loyalty points and free credit. Reportedly, the charge will be applicable from March 8.
Post demonetisation, Paytm had introduced zero per cent platform fee to attract small merchants to accept payments from their wallet
“Paytm pays fee to card networks or banks whenever you use any payment instrument like any other online commerce company. Paytm pays a hefty charges when you use your credit card to card networks and issuing banks. If user simply adds money and takes to bank, we lose money,” said founder and CEO, Vijay Shekhar Sharma.
Furthermore, the digital payment wallet will provide an equivalent amount of cashback to the users for using credit card to add money to the wallet.
The digital wallet company has also added UPI enabled payment and Immediate Payment Service (IMPS) for instant fund transfer between banks using mobile phones. The Alibaba-backed platform has over 200 million wallet users and plans to create a network of 1 crore offline merchants, reported The Hindustan Times.