New Delhi: Paytm has started charging a 2 per cent fee to consumers for adding money to their wallets by using credit cards.
Paytm said that it has started charging fee because some people were misusing facility to top up wallet using credit card for free.
“We saw a disturbing trend when many users started funding their Paytm wallet with their credit cards and transferring it to the bank all for free. They were not only getting free loyalty points which effectively is free cash but also getting access to free credit,” it said.
It said that this “disturbing trend of using credit cards to rotate cash affects our ability to serve our valuable customers” and “for a savvy user it meant freebies at Paytm’s cost.”
Paytm pointed out that it pays fee to card networks or banks whenever consumers 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. Our revenue model requires users to spend money within our network and we make money from the margins available to us on various products/services we offer,” it said.
However, the company said that this 2 per cent fee charges on credit card would be reversed “in the form of a gift voucher for the same amount which will be issued within 24 hours of adding money effectively giving you this fee back.”
“This hopefully keeps unintended misuse of our platform away and as a consumer you still enjoy our services at no extra cost,” it added.
