Facing severe criticism from several quarters, Paytm has quickly rolled back its move to charge 2% charge on recharging wallet with a credit card but said it would impose other features to prevent misuse of cash-back facility.
In a statement on its website, Paytm said: "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. Keeping the millions of customers and merchants interest as utmost priority, we have decided to suspend the 2% fees and will continue to build a series of features to curb such misuse."
Not only the criticism, the rivals of Paytm such as MobiKwik vowed not to charge their consumers to top up wallets using credit cards. "Post demonetisation, in order to boost the governments vision of cash-less India, the company had a stated policy of revoking fees on uploading money through credit cards and today the company reiterated its policy of continuity," said Mobikwik, taking an edge over the biggest rival Paytm.
Paytm has 200 million users and MobiKwik has 55 million users, both aiming to increase their reach in view of the government’s push for cashless economy. Referring to Paytm’s levy of 2% charge on credit card users to dissuade "some financially savvy users (who) exploited this model to rotate money", Mobikwik told VCCircle that the number of people who misuse it is too small.