Acting in the good interest of its loyal customers, Paytm, India’s leading mobile wallet, has suspended its decision to charge its customers 2% extra for recharging via credit cards. This decision reversal comes within 24 hours of the announcement of the extra charge levied on credit card transactions.
Yesterday, we reported how Paytm has decided to punish all its credit card customers for the abuse of its platform done by a few. Paytm complained in their blog post about how some users are using their credit card for getting free money into their bank accounts at the cost of Paytm. These kind of transactions were costing a fortune to the company, hence the need for such a drastic step.
“We will put 2% fee (inclusive of taxes) only on adding money to wallet using credit cards while adding money using any other payment option remains free,” said Paytm while introducing a new charge.
Some Were Abusing The Paytm Platform
Paytm’s business model is to make money via the transactions carried out using its mobile wallet platform. It offers 0% transaction fee facility to its users for transferring cash between Paytm wallet and their bank accounts using any money transfer mode.
However, some users were misusing this 0% transaction fee facility for adding money to their Paytm wallets using credit cards and then transferring that amount to their bank accounts. Paytm had to incur huge transactions costs due to this, but the company had its hands tied due to its 0% transaction fee policy.
“This disturbing trend of using credit cards to rotate cash affects our ability to serve our valuable customers”, adding, “If the user simply adds money and takes to bank, we lose money,” Paytm explained.
As a result, the company was forced to introduce a 2% transaction fee for making transactions on its via the credit cards. The bad part about this decision was the fact that it levied the extra 2% charge on all credit card users for the fault of a few.
Paytm Realised Its Mistake And Reversed The Decision
Paytm soon realised that the decision to charge extra 2% for credit card transactions to prevent misuse of its platform will also hurt those who use credit cards for genuine transactions.
Although Paytm announced to compensate those 2% charges in the form of discount coupons, the company decided to reverse the decision as it affected a large segment of its genuine credit card users.
“We are suspending 2% charge on credit cards for adding money to wallet keeping users’ convenience in mind,” announced Paytm via a blog post.
Paytm has now announced that it will devise other ways to fight the misuse of its 0% transaction fee facility for adding money via credit cards.
“We will introduce new features to prevent credit card misuse in add money,” said Paytm.
The company is also inviting its users to give their valuable feedback on their official forum for improving the platform and its service quality.
This move from Paytm has proved that the company works for the convenience of its large user base and can fight fraudulent practices without affecting the normal innocent users.
Paytm is growing day by day. I hope that one day they will replace PayPal.