Digital wallet company Paytm will levy a 2% fee for recharging the wallet using credit cards. Paytm wrote in its official blog that this 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. The charge is applicable from March 8.
“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 & issuing banks. If user simply adds money and takes to bank, we lose money,” the company wrote in its blog that was shared by founder and CEO, Vijay Shekhar Sharma.
The blog added that there will be no charge for shopping on Paytm or paying bills with credit cards, the fee is only for recharges.
“.. .adding money using any other payment option remains free,” the blog said.
The digital payment wallet will, however, provide an equivalent amount of cashback for using credit card to add money to the wallet.
After demonetisation in November, Paytm had introduced zero percent platform fee to attract small merchants to accept payments from their 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.