Paytm wallet users will have to pay more
Source: IT News / Raju Vernekar

Mumbai, January 12 2020: The Paytm has began charging a fee of two percent, besides compulsory GST, on the wallet loaded in excess of Rs 10,000 using a credit card during a month.

According to the information available on the official website on Paytm, the customers will have to pay 1.75 per cent plus GST for credit card transactions exceeding Rs 10,000 per month limit.

However they will not have to pay anything extra if the transaction value or amount is less than Rs 10,000 .

The new charges have been updated on the Paytm website and are applicable on all transactions done on or after January 1, 2020 .

If a customer desires not to pay this extra amount, he/she can add money to the Paytm Wallet through debit cards, UPI, net banking and other wallets, since there are no charges for using debit cards or the unified payments interface (UPI) system.

How does the charge work? Assume one adds Rs 15,000 in the Paytm wallet using the credit card and as the first top-up in the month.

A two percent charge on this means one pays Rs 300 extra, which goes to the firm.

The remaining Rs 15,000 gets added to one's Paytm wallet.

However, if the amounts are added into the wallet gradually, say, Rs 3,000, followed by Rs 4,000 a few days later and then Rs 3,000, the user will not face any charge till he/she breaches the free top-up limit of Rs 10,000 .

But if an amount of Rs 3,001 added instead of Rs 3,000, a charge will be levied.

Experts in the payments space have observed that Paytm has noticed users loading their wallets using their credit cards and soon transferring the funds their bank accounts.

This amount would then be spent or invested.

In other words, the wallet user would take advantage of the 40-day interest free period available on credit cards.

Paytm's charge is meant to plug a loophole that some users were taking advantage of, by borrowing sums in a circuitous way to benefit from the 40-day interest-free period that credit cards give.

One can maintain one or two mobile wallets and divide the funds between them if one really wish to avoid these charges.

Of course, other mobile wallets may follow the Paytm route eventually.

This is not the first time that Paytm has imposed a charge for credit card fund transfers.

In March 2017, the firm had announced that it would levy a two percent charge on adding funds to the wallet using credit cards.

However, the company later withdrew these transaction charges stating that it would cause inconvenience to a majority of its customer base.

In the same month, MobiKwik had said that it will continue to offer free loading of funds using credit cards.

Sunil Khosla, Head Digital Business, India Transact Services Limited says, "Other wallet companies may introduce loading charges using credit cards after taking into consideration feedback from Paytm customers.

They may charge for loading amounts more than Rs 5,000 or Rs 20,000 using credit card.

It will be interesting to watch" .

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