Digital payments firm Paytm has started levying fees when consumers add more than Rs 10,000 in a month to their wallet via credit card from January 1, 2020.
According to Paytm, the company has decided to charge a fee of 1.75% + GST for adding more than Rs 10,000 through any credit card in a month.
However, there are no charges for using other payments options such as debit cards or the unified payments interface (UPI).
In 2017, Paytm announced a charge of 2% on the loading of wallet via credit card but it had rolled back the plan citing inconvenience to its customers.
The aim is to leverage a large section of its over 350 million customers and merchants who use the platform to top up their wallets via credit card and transfer the money back to their bank accounts.
As of now, digital wallet users take advantage of the 40-day interest-free period offered by most of the credit card providers. The decision of levying the fee would keep a tab on users who have been encashing money by using a credit card without any cost.
While a majority of Paytm wallet users will not be affected by this decision, frequent consumers of the platform who spend more than 10,000 in a month will have to bear the cost.
Paytm’s competitors in this space such as Mobikwik doesn’t levy any charge for adding money to a wallet via credit card. The move by Paytm might now force other players to follow suit.
Update: The post has been updated. PhonePe doesn’t allow to add money into its wallet via credit card.
