Paytm withdraws 2% fee on wallet top-up through credit cards, says will strengthen the system to prevent fraud

BT Online   New Delhi     Last Updated: March 10, 2017  | 14:08 IST
Paytm withdraws 2% fee on wallet top-up through credit cards, says will strengthen the system to prevent fraud

Paytm has withdrawn the 2 per cent fee on adding money to mobile wallets using credit cards. The firm made a U-turn over its decision merely after two days of introducing the levy.

In a bid to check rampant 'misuse' of credit cards for wallet recharge, Chinese firm Alibaba-backed Paytm had introduced the fee on March 8 after it found multiple users using its platform to get free credit by using credit cards to top up their mobile wallets and then transferring the money back to their bank accounts at zero transaction cost.

"Keeping the millions of customers' and merchants' interest as utmost priority, the company has decided to remove the 2 per cent fee and announced that it will be using a series of features and constantly target the misuse," Paytm said.

However, after introducing the levy on Wednesday, Paytm also said that the 2 per cent fee charges on credit card would be reversed in the form of a discount coupon for same amount. Paytm also announced addition of two new payment options - UPI & IMPS.

Two per cent discount coupon will be sent within 24 hours of adding money using credit card. This change applies from March 8th. The company said customers need to spend at least Rs 250 using a credit card to be eligible for this offer.

The company is now focussing on strengthening the team that focuses on identifying and blocking various types of misuse.

While Paytm had started levying the 2 per cent fee, its smaller rival MobiKwik had said it would keep all such transactions free.

Mobile wallet companies have to pay charges to card networks and issuing banks when consumers use their credit cards and so lose money if users simply add money from credit cards to wallet and transfer the same to the banks.

Earlier this month, Paytm had said it has blocked transactions through some credit cards and had put a transaction engine in place to detect such attempts.

"This will ensure we identify genuine customers and help us serve them better," it had said.

Last month, Paytm e-commerce has announced the launch of its new Paytm Mall app on Android. The Paytm Mall will come with over 17 fulfillment centers across India.

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