Paytm suspends 2% fee on using credit card to top up but says will have system to prevent misuse
Paytm has decided to roll back 2 percent charge it imposed on topping up its wallets using credit card but said it will introduce new features to prevent misuse of the facility.
“With an intent to prevent the misuse of transfer to bank facility at 0%, we had applied a refundable fee of 2% on add-money through credit cards. At the same time, we are conscious that this move caused inconvenience to a large segment of our users, including those who are using their credit card for genuine transactions. Keeping the millions of customers and merchants interest as utmost priority, we have decided to suspend the 2% fees and will continue to build a series of features to curb such misuse,” Paytm said in a blog post on its website.
A day after the company introduced the charge, its smaller rival MobiKwik on Thursday said it will allow consumers to top up wallets using credit cards without any additional charges.
MobiKwik will continue to offer free uploading of money into their wallet for all users, including credit card users, it said in a statement.
Post demonetisation, in order to boost the governments vision of cash-less India, the company had a stated policy of revoking fees on uploading money through credit cards and today the company reiterated its policy of continuity,” it added.
MobiKwik currently serves over 55 million users and 1.4 million merchants, while Paytm claims to have 200 million customers. By the end of 2017, MobiKwik aims to increase its user base to 150 million and serve over 5 million merchants.
Paytm’s decision comes after Mobikwik’s decision to continue with free facility.
Defending its decision for the levy, Paytm had on Wednewsday said it found multiple users using its platform to get free credit by using credit cards to top up their mobile wallets and transferring the money back to their bank accounts at zero transaction cost.
“Some financially savvy users (surprisingly many of them employees of national financial institutions) exploited this model to rotate money. This may surprise normal users like most of us but for a savvy user, it meant freebies at Paytms cost,” Paytm had said.
However, according to a report in VCCircle, Mobikwik has said the number of people who misuse the facility is too small and it may be because of this the company is ready to bear the cost of such transactions.
“People don’t pay anything when they use their credit cards to transfer money to their bank accounts routed through the wallet. This is the loophole. But, people who are doing it are a very small percentage, almost negligible. Hence, continuing our focus on customer acquisitions and increasing transactions on our platform, we have decided not to levy such charges,” the report quoted a Mobikwik spokesperson as saying.
