Digital wallet company Paytm will now levy a 2 percent charge for adding money into the wallet using credit cards. No charges will be applicable on money transferred using debit cards or net banking.
A report in the Economic Times says that this has been done as more and more users were using the platform to get free credit by using credit cards to fill up the wallet and then transferring that money back into their bank accounts.
The process removed the transaction cost for customers. Paytm does not charge any fee to transfer money into bank accounts from the wallet.
“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,” the company said in a blog post .
It further added that Paytm had to bear hefty charges when customers use credit card to card network and issuing banks.
However, the company also said it will provide same amount of cashback for using credit cards to top-up the wallet.
After demonetisation in November, Paytm had introduced zero percent platform fee to attract small merchants.