Paytm explains why it decided to impose 2% fee of credit card wallet recharge: Full text

Online recharge platform Paytm on Wednesday started levying a 2 percent charge on customers who recharge their wallets using credit cards, in a bid to curb misuse of the facility, which was originally meant to help its customers.

The company said some financially savvy users exploited this model to rotate money by recharging the wallet using their credit cards and then transferring this fund to their bank accounts. The 2 percent charge is aimed at putting an to this misuse.

"There will be no fee when you shop on Paytm or pay for any utilities using your credit card or any other payment option but to avoid the misuse highlighted above, we will put two percent fee (inclusive of taxes) only on adding money to wallet using credit cards while adding money using any other payment option remains free," the company said in a blog.

Here's the full text of the blog:

At Paytm we allow multiple payment options when you buy any product or pay for any utilities. We offer you to pay using Credit Card, Debit Card & Net Banking. Now, we are also adding 2 new payment options — UPI & IMPS. All these payment options are also available when you add money to your wallet. Every day millions of our customers use various methods to pay for products/services or add money to wallet.

As you are aware, in the month of November we launched a new payment platform for small merchants at 0 percent fee. Millions of merchants are accepting Paytm at their shops/establishments. They prefer to take money to their bank accounts and as a promise to democratizing payments, we made transfer to bank fee at 0 percent. This was extended to all our users as many shopkeepers/merchants also used their personal Paytm accounts to accept payments at their Shops.

This 0 percent transfer to bank fee left an opportunity to misuse this great service meant for our valuable customers. 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_new_380Incidentally, Paytm pays fee to card networks or banks whenever you use any payment instrument like any other online commerce company. Paytm pays a hefty charges when you use your credit card to card networks & issuing banks. If user simply adds money and takes to bank, we lose money. Our revenue model requires users to spend money within our network and we make money from the margins available to us on various products/services we offer.

We understand many of us use credit cards for consolidating all our monthly payments and using it to get a credit period for buying a product/service but this disturbing trend of using credit cards to rotate cash affects our ability to serve our valuable customers.

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 Paytm’s cost.

To avoid this misuse, we are making some changes in our terms. There will be no fee when you shop on Paytm or pay for any utilities using your Credit Card or any other payment option but to avoid the misuse highlighted above, we will put 2 percent fee (inclusive of taxes) only on adding money to wallet using credit cards while adding money using any other payment option remains free. However, this 2 percent fee charges on credit card would be reversed in the form of a gift voucher for the same amount which will be issued within 24 hours of adding money effectively giving you this fee back. This hopefully keeps unintended misuse of our platform away and as a consumer you still enjoy our services at no extra cost.

A gift voucher will be sent within 24 hours of adding money using credit card. This change applies from March 8th. (Note: You will get a gift voucher by an email & SMS within 24 hours. You need to add more than Rs.250 using a Credit Card to be eligible for this offer)

We recommit ourselves towards 0 percent charge for credit card, debit card, net banking, UPI & IMPS when you purchase any product on Paytm or pay for any utilities.
We suggest you try out our new payment options — UPI (available on Paytm App & or IMPS (currently available on Paytm website) to add money. UPI & IMPS are easy to use, powerful platforms made by our friends at NPCI. (Read this


Q. When will I get the gift voucher in lieu of 2 percent credit card fee?

A. You will receive a gift voucher totaling the same amount charged to you as fee in an email & SMS within 24 hours of adding money

Q. Where can I use that gift voucher?

A. You can use that gift voucher on Paytm for various services including recharges, bill payments, movie tickets, shopping, bus tickets, Air tickets & all other services on Paytm. However, you can not use this voucher on Add money transaction

Q. Will it be a promo code? How do I use that?

A. Gift voucher will contain a unique promo code. When you are making any purchase on Paytm or doing a checkout from our cart, you will see a promo code field where you can apply this coupon. Amount will be given as an instant cashback post your transaction

Q. Can you explain the value of gift coupon that I will receive?

A. For example, if you added 500 to your paytm wallet, you would have been charged 2 percent = Rs.10 as credit card fee. You will then get a gift voucher worth Rs.10 in your email/SMS.
While doing a checkout on Paytm, please use gift card code shared with you.
If you doing a purchase of Rs.10, you will get a cashback of Rs.10
If you doing a purchase of Rs.20, you will get a cashback of Rs.10
If you doing a purchase of Rs.5, you will get a cashback of Rs.5
This cashback will be given instantly in your wallet which can be used for subsequent transactions on Paytm

Q. Can I use this gift voucher on your partner Apps/websites?

A. No, this voucher can only be used in Paytm App

Q. I add money using credit card on Uber, will I be charged 2 percent there?

A. No, there won’t be any charge on partner Apps including Uber when you add money using a credit card.

Q. What will be the expiry date of this gift voucher?

A. This gift voucher will expire on 31st December 2017. For some reasons, if you fail to use the voucher, you can write to us to get it extended. Reach out to us at

Q. Can this voucher be used partially? If I get a voucher of Rs.50, can I use it multiple times till Rs.50 gets exhausted?

A. No, you have to use this voucher at one go. This voucher is only applicable once

Q. If I do multiple Add money transactions, do I get this voucher every time? Can I club these vouchers?

A. Yes, you will get a new gift voucher every time of the credit card fee charged to you. No, you won’t be able to club it. You will have to use them separately

Q. Do I have to pay 2 percent every time I do any transaction on Paytm?

A. No, this 2 percent is applicable only on Adding money to wallet. There will be no charge if you use your credit card to pay your bills, do recharges or make any purchase on Paytm directly. There is no credit card fee on transactions done using Paytm in our partner apps like Uber, Zomato, Big Basket, Swiggy and all other Apps that use Paytm Wallet.

Q. Is there any fee on Debit cards, Net Banking, UPI or IMPS?

A. No, all other payment modes have no fee whatsoever.

Thank you for being with Paytm. We value your suggestions. Share your views with Paytm community at —

Updated Date: Mar 09, 2017 15:52 PM

Also Watch

IPL 2018: Royal Challengers Bangalore eye revival against Chennai Super Kings as 'Cauvery Derby' comes back to life
  • Thursday, April 26, 2018 In the Kanjarbhat community, a campaign against 'virginity tests' is slowly gaining ground
  • Tuesday, April 24, 2018 It's A Wrap: Beyond the Clouds stars Ishaan Khatter, Malavika Mohanan in conversation with Parul Sharma
  • Monday, April 9, 2018 48 hours with Huawei P20 Pro: Triple camera offering is set to redefine smartphone imaging
  • Monday, April 16, 2018 Rajyavardhan Singh Rathore interview: Sports can't be anyone's fiefdom, we need an ecosystem to nurture raw talent

Also See