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Paytm to levy 2 per cent transaction fee on recharging wallet with credit card
Paytm will now charge a transaction fee of 2 per cent in case you recharge your Paytm wallet with a credit card.

On Wednesday, Paytm withdrew its free of cost transfer to bank facility as it had witnessed that a large number of customers would use the facility to transfer money from their credit cards to Paytm and from Paytm to their bank accounts. On such transactions, a fee charge of two per cent will now be levied.

"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 two per cent 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 wrote on its official blog.

However, for now, the company is giving a cashback of two per cent on such transactions which will be added to the wallet within 24 hours of the transaction.

"This two per cent fee charge on credit card would be reversed in the form of a discount coupon for same amount which will be issued within 24 hours of adding money effectively giving you this fee back," the company said.

The company also said that it has to pay a big amount in case of such transactions which do not bring much money for Paytm.

"Paytm pays fee to card networks or banks whenever you use any payment instrument like any other online commerce company. Paytm pays a hefty charge when you use your credit card to card networks and 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," the blog said.

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