Yesterday we had reported that Paytm will start levying 2% fee for adding money to Paytm wallet via credit cards. The company took a u-turn today and announced that it will not levy any charges for such transactions.
Making the announcement on its blog, Paytm said:
“We are suspending 2% charge on credit cards for adding money to wallet keeping users’ convenience in mind. 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.”
The company revealed that it will be working on building other features to prevent users from misusing the facility of adding money to Paytm wallet using credit cards.
Paytm’s decision to impose a 2% fee for credit card add money transactions had resulted in a lot of outrage on social media. While Paytm tried to justify its decision by citing that a number of users, including those working in financial institutions, were using this feature to obtain an interest free short term loan.
Paytm reported that users would add money via credit cards to Paytm wallet. Once the money was loaded in wallet, these users would then withdraw the entire balance into another bank account. At the end of the day, instead of availing a credit, users would end up with an interest free short term loan. The 2% fee that Paytm announced was to help curb this menace.
However, after realizing that this had caused a big backlash from genuine users, Paytm withdrew its decision. Instead, the company announced that it will now work on bringing a number of new features to curtail the widespread misuse of this facility.
It is worth noting that debit cards and internet banking modes were never affected by this change.