Move comes to tap merchants who exploited the loophole to gain credit points
#LATEST | Ever since demonetisation, people have been looking for ways to bypass the digital transaction fee they have to pay.
Targeting the small merchants, Paytm had, in November, introduced zero per cent platform fee, to encourage them to accept payments through their wallet during demonetisation. However, merchants used this facility to add money to the wallet and transfer it back to their linked accounts without paying any transaction fee. This was costing Paytm a hefty amount. Also, adding money to the Paytm wallet though credit card gives credit points that can be used to buy goods. People used this loophole and earned plenty of points.
" 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," Paytm said in a blog.
In the wake of this situation, Paytm will now levy a two per cent fee for adding money to the e-wallet using credit card. However, it will give an equal amount of cash back for using credit card to add money in the wallet. The cost of adding money to the wallet through other modes such as net banking and debit cards remains non-chargeable.
Targeting the small merchants, Paytm had, in November, introduced zero per cent platform fee, to encourage them to accept payments through their wallet during demonetisation. However, merchants used this facility to add money to the wallet and transfer it back to their linked accounts without paying any transaction fee. This was costing Paytm a hefty amount. Also, adding money to the Paytm wallet though credit card gives credit points that can be used to buy goods. People used this loophole and earned plenty of points.
" 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," Paytm said in a blog.
In the wake of this situation, Paytm will now levy a two per cent fee for adding money to the e-wallet using credit card. However, it will give an equal amount of cash back for using credit card to add money in the wallet. The cost of adding money to the wallet through other modes such as net banking and debit cards remains non-chargeable.
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